Where would a 1099-NEC be entered? It is not for self-employment but for Connecticut's Hero Pay from last year, through public partnerships llc.

[mathewgagnon]

Received a 1099-NEC from public partnerships llc related to last years connecticut hero pay, aka essential worker pay of $1,000. How would this non employee compensation be entered? As far as I can tell it's only enterable as self employed following turbotax guidelines.

[ThomasM125]

You would enter the Form 1099-NEC in the Other Common Income section of TurboTax, and then Income form 1099-NEC. If you feel the income is not self-employment income, you can check the box you will see that says This is not money earned as an employee or self-employed individual, it is from sporadic activity or hobby (this is not common.) However, it is possible the IRS will see the income as self-employment income, especially since it is related to your job. That may be why it was reported on Form 1099-NEC, which is normally reserved for self-employment income.

[mathewgagnon]

So basically it is self employed tax and treated like it is a self employment job, even though its a $ amount awarded for having the separate job? Entering it under the tradional spot for 1099-NEC self employment was the right way. I'm glad that it was done correctly, and what you said makes sense. Thanks for the advice.

[Dongolfer]

So when you entered this amount as a not common sporadic form of income, did your tax return amount change? Did the 1,000.00 end up getting taxed or not? 

[MonikaK1]

Form 1099-NEC is generally intended to be used for nonemployee compensation that is earned by a contractor or other self-employed individual, but you can enter it in TurboTax and identify the reason for the payment if it was other than self-employment income:

• In Wages and Income, select Other Common Income and See More
• Select Form 1099-NEC
• Answer the questions that appear, and enter a description of the reason for the payment
• 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 (this is not common)" if that is the choice that best reflects the nature of the payment

For more information on Forms 1099-NEC, see this TurboTax article.

@mathewgagnon

[Dongolfer]

So you entered it as a 1099-new and called it sporadic income?  Did you return amount or liability change? I read the IRS guidelines for state payments. There is a section on Spill over payments for this 2023 hero payment. But no where does it explain the correct way to enter the 1,000.00. Tried calling IRS and there is no live person available at all. The state of Ct is not taxing the amount. 

[RobertB4444]

It is true that the state of Connecticut is not taxing it but unfortunately the federal government is.  When you enter the 1099-NEC the way @ThomasM125 has detailed above it will add the amount to your taxable income and you will pay taxes on it (on your federal return) but you don't have to pay self-employment tax on it (which is the social security and medicare.

When you get to your Connecticut return you will also need to tell the system that this isn't taxable in Connecticut.  Follow the prompts to exclude that money from income on your state return.

@Dongolfer 

[Dongolfer]

We don’t make the rules but when I include my 1,000.00 - 1099-NEC to my other income section , I end up getting 300.00 less on my return. I do understand that I will have to take off the 1,000.00 on my CT return. Does anyone know how the CT pandemic hero pay was taxed federally in 2022? 

[Dongolfer]

Thomas , I did exactly what your instructions stated. When turbo tax checks for errors , it is asking me for a schedule C. I am not self employed. Now what? Thanks

[RobertB4444]

First, when entering your 1099-NEC you need to enter it in the '1099-MISC and Other Common Income' section here-

If you entered it anywhere else you need to go back and delete it and start over.

The first screen when entering your 1099-NEC here asks for the information from the form.  Copy it all in as is and then go to the second screen.  It asks for a description of the income.  Just put 'Connecticut Hero Pay' and go to the third screen which is the one that @ThomasM125 entered above.  Tick the box and then you should be done.  It will enter as 'Other Income' and not link to a schedule C.

@Dongolfer 

[Dongolfer]

Did you have to fill out a schedule C form? I can’t go any further in turbo tax until schedule C is completed. The schedule came up when turbo tax checked for errors. Thanks

[Dongolfer]

I did exactly what you mentioned. It came up with other income like you stated. I then got to the review section of my return on turbo tax.  It then asks me to correct any entries that need attention. I clicked on continue and 11 entries need attention. They are all related to schedule C. This is all because of the 1099-NEC. I can’t get by this section to finish my return. I’m stumped. Need help.  Thanks

[RobertB4444]

At some point your answers generated a schedule C and the system wants you to tell it all about your business.  Answering all those questions wouldn't make a difference to your tax return because the schedule C would be all zeroes.  But it's a hassle that can be avoided.

You will need to delete the schedule C that the system generated.  Go to 'Tools' at the bottom left of your screen.  Click on that and then on 'Tax Tools'.  Then click on 'Delete a Form'.  Go down the list of forms here and find the schedule C.  You'll also need to delete any of the schedule C worksheets that you find here.  Once you have deleted those don't delete anything else - tax forms are inter related and if you delete the wrong one you can mess up a lot.

That should fix the problem with your final review.

@Dongolfer 

[grega]

I am a tax preparer and we are seeing these now. This is taxable on your federal return but not on your CT return.

We contacted CT DRS and are being directed to input CT Hero Pay as follows.

On the federal return - this income needs to go on Federal Schedule 1, Line 8z, as Other Income.  It is not business income, it is miscellaneous income*, and must not generate a Schedule C that will further generate self-employment taxes. 

We note it as "1099-NEC xx-xxxxxx", where the xxx are the "PUBLIC PARTNERSHIPS LLC" EIN.

This should not be designated as "Earned Income".

On the state return - Because this is free of state income tax, the value should be added to CT Schedule 1, Line 49, "Other - Specify" so that it will be subtracted from AGI. We designate it as "CT Premium Pay" or similar.

*I get the impression CT muffed it, and should have sent as a -MISC and not -NEC. But here we are...

[Dongolfer]

It worked. Only took out federal tax, not social security of Medicare taxes. The only other thing is that on the schedule 1 work sheet, line 8z, describes my hero pay as 1099-NEC  non employee compensation. I wish it said Connecticut pandemic hero pay that I typed in the description. Anyway it is what is. Thanks again