The IRS generally assumes that 1099 income is from a business. Because of that, it'll be categorized it as self-employment income on Schedule C. However, since this was a one-time benefit and not a job or a business venture, you can answer the questions in the 1099-MISC input to make sure a Schedule C isn't created.
Here is how to report the 1099-MISC in TurboTax Online:
- Navigate to Federal > Wages & Income > Miscellaneous Income> Form 1099-MISC
- Add the 1099-MISC, reporting the information as printed on the form, Continue
- Describe the reason for this 1099-MISC
- Select None of these uncommon situations apply, then continue
- Select No, it didn’t involve work that's like your main job and continue
- The next screen asks how often you get income from FMLA. Select only the year of this specific 1099-MISC, 2025.
- Next, select No, it didn't involve the intent to earn money
- Verify that the amount is now populated on Schedule 1, Line 8z "Other Income."