topic My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her on her mortgage during closing, does she really need to claim this as income? in Self employed

My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her on her mortgage during closing, does she really need to claim this as income?

LoriWing — Tue, 03 Feb 2026 13:24:23 GMT

Truist said this was a first time home buyer incentive but it is really reported as income?

Re: My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her o...

JohnW152 — Tue, 04 Feb 2025 19:47:42 GMT

Yes, this should be reported as income. It represents value received by your daughter, and Form 1099-MISC is typically only used to report taxable income.

To enter your Form 1099-MISC information so that it won't be considered self-employment income in TurboTax Online:

Open TurboTax Online
Select Tax Home in the left pane
Select the dropdown to the right of Wages & Income
Select Pick up where you left off, Review/Edit or the edit pencil
On the Great! We've got your income info page, select the dropdown to the right of Other Common Income -- Tax refunds, 1099-G, 1099-NEC, 1099-MISC, 1099-K
Select Start to the right of Form 1099-MISC
Select Yes on the Did you get a 1099-MISC? page
Enter the information from your 1099-MISC on the Let's enter the income from your 1099-MISC page, then select Continue
On the Describe the reason for this 1099-MISC screen, enter First time home buyer incentive, then select Continue
On the Do one of these uncommon situations apply? screen, select the bullet next to None of these apply, then select Continue
On the Did the First time home buyer incentive involve work that's like [your] main job? page, select the bullet next to No, it didn't involve work like [your] main job, then select Continue
On the How often did [you] get income for First time home buyer incentive? page, answer appropriately, then select Continue
On the Did the First time home buyer incentive involve an intent to earn money? page, select the bullet next to No, it didn't involve an intent to earn money. This indicates to the program that this wasn't self-employment income, so self-employment tax won't be triggered. Select Continue
On the Your 1099-MISC summary page, select Done, unless you have more Forms 1099-MISC to enter

If the TurboTax Online navigation described above doesn't look like what you're experiencing, see the TurboTax Help article Why does the TurboTax navigation menu look different for me?.

**Say "Thanks" by clicking the thumb icon in the post

Re: My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her o...

LoriWing — Tue, 04 Feb 2025 21:38:17 GMT

Thank you for the guidance!

Re: My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her o...

LoriWing — Mon, 10 Feb 2025 21:52:26 GMT

Upon further investigation, I realized that the $5100 was actually a grant from the lender. With that being the case is it still taxable? I ask because we never had to pay taxes on educational grants.

Thank you!

Re: My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her o...

DianeW777 — Mon, 10 Feb 2025 22:35:51 GMT

Yes, it's still taxable. Generally, only down payment assistance provided by a nonprofit organization may be tax free depending on facts and circumstances. A down payment grants provided by a bank will be taxable income to the recipient, your daughter. It may be buried in the the loan documents, however the 1099-MISC was used to report it and the IRS has a copy as well.

@LoriWing

Re: My daughter received a 1099-MISC from her lender for $5100. This was a credit they gave her o...

Katygirl — Tue, 11 Feb 2025 00:33:34 GMT

Thank you for the info. Once I saved my return, exited the program and returned - I was able to follow your suggestions.