My wife received $2000 in 2022 for being a day care worker teacher during covid on a 1099-MISC. it is being categorized as Business Income Schedule C is this correct?

[bns_turbo_tax]

We Live in Georgia it may have been paid to her employer via the state. The payment was paid to her by her employer. The explanations i found refer to 1099-NEC but it is clearly a 1099-MISC not sure if there is a difference but it is increasing the tax owed as business income versus being in 1099-MISC and Other Common Income section. I am not sure why its being treated as business income?

[ErnieS0]

If your wife was paid to perform services and was not an employee, then should she would be considered self-employed because no taxes were withheld from her pay.

Being a day care worker teacher sounds like she was performing services, as opposed to receiving a Covid-19 relief payment.

Not all income reported on Form 1099-MISC is self-employment. For example, the form is used for rents and royalties.

The tax owed on business income will be higher because you tax bill includes payments for Social Security and Medicare tax, which were not withheld from your wife’s pay, so they are added to the taxes on your return.

Self-employed persons can claim ordinary and necessary expenses to reduce their tax burden.

See The ultimate guide to tax deductions for the self-employed.