1099- NEC Retirement Christmas Union Bonus

JackandRoxxy — Tue, 11 Feb 2025 02:59:13 GMT

Hello,

My father is retired....long retired (he's 80). Each year is receives a "Christmas Bonus" from his union (~4 to 5 thousand dollars). Each year it has been sent on a 1099 - MISC form. The amount does not have any taxes withheld when it is paid out.

In the past I have found that entering the 1099 results in 2 different scenarios. Scenario one has it taxed at a pretty high amount (for example it has changed his amount owed to federal from zero to ~$1500 owed. Scenario 2 results in about $900 owed if I do it according to a previous post I found here that treats the money as a bonus and not earned income.
https://ttlc.intuit.com/community/taxes/discussion/i-received-a-christmas-bonus-on-a-1099-misc-as-other-income-why-is-it-considered-business-income-and/00/595608/message-id/242142

This year the form came in as a 1099-NEC. So upon entering the money this year and following the prompts, I am stuck trying to figure out the amount truly owed. I am getting prompts about business expenses and such. It's a bonus, from the union, not from any work he did at all recently. So I get that it may/should be taxable... but I am unsure how much of it is truly required to be taxed, if any should his income be so little given he receives social security and a small pension. It seems like it is being treated similar to the scenario one situation when it was a 1099MISC.
I hope I am asking/making things clear. I do not really know much about taxes, short of being able to do the step by step stuff in turbo tax. Any guidance would be appreciated.

Re: 1099- NEC Retirement Christmas Union Bonus

MinhT1 — Tue, 11 Feb 2025 13:34:39 GMT

If you receive a form 1099-NEC for a retirement Christmas bonus, then you are not considered as self-employed and do not need to file a Schedule C.

Enter your form 1099-NEC by following the instructions in this TurboTax Help article.

In the follow-up interview, on the page titled What type of income is on your 1099-NEC? reply that it is a Hobby.

The income will be reported as Other Income. There is no self-employment tax.

Re: 1099- NEC Retirement Christmas Union Bonus

JackandRoxxy — Thu, 13 Feb 2025 23:57:42 GMT

Thank you so much for the information. It was a bit better, only ~900 owed rather than ~1500.

topic 1099- NEC Retirement Christmas Union Bonus in Retirement tax questions

1099- NEC Retirement Christmas Union Bonus

Re: 1099- NEC Retirement Christmas Union Bonus

Re: 1099- NEC Retirement Christmas Union Bonus