I got paid for attending training, but received a 1099-NEC from the training center. Now I have to pay a self employment tax? WHY?

[DianeW777]

It depends. If you were paid for a service as an independent contractor then this would be considered self employment income. This would require social security and medicare taxes (self employment tax)  to be paid on this income.

If you believe you are not self employed it can be handled differently by adding the income to your return without paying the self employment tax.

Key questions to consider are:

1. Was this done for or through your employer?
2. How did it come about that you decided to take this training.

If you believe you are not a self employed person you can report the income as 'Other Income'.  Be prepared to show your reasons and tax records to prove your point.

To report this as Other Income you can use the following steps.

Go to the Wages and Income  section of TurboTax

1. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
2. Select Other reportable Income > Enter a description (Training) and the amount

See the IRS Form SS-8 to determine if you should have been paid as an employee.  If you believe this should have been reported as wages by your employer you can use the steps below. You would pay your normal half of social security and medicare, then the IRS would go after your employer for their share.

On the dotted line to the left of the amount on line 1 there will be a notation "F8919" and the amount. Form 8919 will be included in the return, with reason code H in column (c). Form 8919 will calculate the Social Security and Medicare taxes that your employer should have withheld from the bonus. The total of these taxes will appear on Schedule 2, line 6,  and will be included in your total tax liability.

1. Click the Federal Taxes tab. (In TurboTax Self-Employed or Home & Business click the Personal Tab.)
2. Click Wages & Income. (In TurboTax Self-Employed or Home & Business click Personal Income.)
3. Scroll all the way down to the last section "Less Common Income." Click the Start button for the last topic, "Miscellaneous Income, 1099-A, 1099-C."
4. On the next screen click the Start button for "Other income not already reported on a Form W-2 or Form 1099."
5. The next screen asks "Did you receive any other wages?" Select Yes and click Continue.
6. The next two screens ask about household employee wages and sick or disability pay. Click Continue on these two screens without entering anything.
7. The next screen asks "Did you earn any other wages? Select Yes and click Continue.
8. The next screen asks the source of the other earned income. Select "Employee compensation that was not reported on a W-2."  Ignore the note that says not to enter compensation for which you will receive a 1099. Click Continue.
9. On the next screen, "Employee Compensation Not Reported on a W-2," click Continue.
10. If you are filing a joint return, you will get a screen asking which one of you the income is for. Select your name and click Continue.
11. On the next screen, "Report Your Wage Income," enter the employer's name and EIN from your W-2. When entering the EIN, you must enter the hyphen after the first two digits. For Total Wages Received, enter the amount on the 1099-NEC. Select Reason Code H. Click Continue.
12. On the next screen, "Report as Wages," click  Done.
13. This returns you to the Miscellaneous Income screen. Click Continue.