1099-NEC Mississippi

[noahmichaelg]

My wife did a Theatre show in Mississippi and we live in Tennessee. They sent a 1099-NEC but when she goes to file for state taxes in MS, we get confused on where to list the income. Listing it as "business loss/income" caused a rejection. Note: This is a one-off, sporadic event; not consistent income, nor does she have a business. 

[GeorgeM777]

Your 1099-NEC appears to be a form of "other income" rather than income from self-employment.  How did you characterize this income on your federal return?  If you characterized it as other income--which will appear on line 8 of Form 1040--then when you complete your MS non-resident return, you should see a screen that will ask you to enter on your MS return the percentage of this other income from your federal return that is MS source income.  You would then select 100% or enter the full amount under the MS column.  

If you did not enter this 1099-NEC as other income on your federal return, then you should go back to your federal return and report this 1099-NEC as other income first before moving on to your MS non-resident return.  

To enter this income as other income on your federal return you have two options.  Both will produce the same result, yet one method involves fewer screens.  Those methods are described below.

Here are the steps to enter the 1099-NEC as other income:

1. To enter other income in TurboTax online, click on Wages & Income, left side of screen. 
2. Scroll down the page to Less common income, click on the drop-down arrow and select Miscellaneous Income.  
3. From the list select Other reportable income and respond to the questions on the screens that follow. 
4. On the screen, Other Taxable Income, you may see information indicating that you should not report a 1099-MISC in this section.  Just ignore that statement and enter your information.  

If you are using TurboTax CD/download, the process is similar.  After selecting the Personal tab, and the Personal Income tab, scroll down the screen to Less Common Income, and select Miscellaneous Income.  Enter your information. 

There is another section of TurboTax that relates to 1099-Misc but you can use it to enter your 1099-NEC too.  This section is Other Common Income.  Please note that when working through the Other Common Income section, you will see a screen asking whether your 1099 represents an intent to earn income/money, and while it may seem counterintuitive to select No, that is the response you need to select.  If you select Yes, TurboTax will report this income as self-employment income, and you will be back in the tax position you want to avoid.  Thus, select No, and continue through the application. 

When you are done with your federal return, then go back to your MS return.  Follow-up with any other questions you have when you are back in the MS section of TurboTax.  

@noahmichaelg 

[noahmichaelg]

Thanks for your help. We've amended the federal return (Less Common income: Hobby). In the Mississippi return, we corrected the information necessary but now it is asking "Check this entry: Form 80-107 Worksheet: 1099-MISC ID Number must be entered" however we wouldn't have that ID. Any insight?

[noahmichaelg]

Upon further research, we found information that makes us believe that we may not need to file a MS return for the following reasons: 

• We don't have Mississippi Income Tax withheld from our wages. (only received a $500 Honorarium)
• Non-Resident or Part-Year Resident without income taxed by Mississippi. (Non-resident, one time appearance)
• $500 honorarium is under the taxable threshold (0% on the first $5,000 of taxable income)

Does this seem correct that we may not have to file in MS?

Resource: https://www.dor.ms.gov/individual/tax-rates

[DawnC]

That's correct, you do not have a filing requirement in MS if your MS taxable income is only $500.  

[noahmichaelg]

Great! Since our MS return got rejected, I understand it is not considered to have ever been filed. And now, knowing that we do not have a state filing requirement for MS, is there anything we need to do in TurboTax to get rid of that state? (Since we purchased it and have it listed as a state we “thought” we needed to file to?) We just don’t want anything to look like we didn’t finish/still owe and incur any penalties

[AmyC]

The tax program is your personal space with your tax files. Only what has been sent and accepted is viewed outside of your account. You have no worries that anything is left undone. MS does not require the return so the information can just sit in your account.