Are you referring to the Massachusetts Essential Worker program? If so, Massachusetts defines the payment as a taxable grant for Federal reporting purposes. See here:
Q. Will premium payments be treated as taxable income?
Under current law, premium payments are not subject to state income tax but may be subject to federal income tax.
Because the IRS reporting threshold for taxable grants is $600, no 1099-G will be issued from the Department of Revenue.
Report the IRS form 1099-NEC information as other income by following these steps:
- Select Federal from the left side menu.
- Click on Wages & Income.
- Scroll down to Other Common Income. Click down arrow to the right.
- Click Start / Revisit to the right of 1099-NEC.
- At the screen Describe the reason for this 1099-NEC, enter the reason for this income.
- At the screen Does one of these uncommon situations apply?, select This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby.
The entry will be reported:
- on line 8j of Schedule 1 of the Federal 1040 tax return, and
- on line 8 of the Federal 1040 tax return.
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