How do I report Florida's First Responder Recognition Payment on my taxes?

You don't. FL considers it a reimbursement of your personal expenses. A qualified disaster relief payment under IRC code 39.

See page 5 of the FL Dept of Economic Opportunity guide here.

Hi thanks for the response. According to the info about the check we received, the payment was for $1,000 and we received over a thousand to cover the taxes we would have to pay on it. Am I misunderstanding this? 

Possibly.  The payments made under the Payments to Pandemic First Responders program are considered qualified disaster relief payments under 26 U.S.C. § 139 and will not have income tax or employer taxes withheld.

So what should I report it as? Is this like a stimulus check? The extra income was nice but now it is getting complicated, ugh.

As DianeW777 stated, the payment is considered a disaster relief payment for reimbursement of expenses and will not have taxes withheld.  If you did not receive a 1099, in all likelihood a 1099-G, there is no need to include it on your tax return.

@samanthabaugus 

They are SUPPOSED to be tax free payment. The state of florida issued a 1099-NEC. What are we supposed to do now?

I believe your information is old and inaccurate.  The First Responder Recognition payment that was issued during the 2021 tax year was not taxable.  No 1099 was issued for that payment.

The payment that was issued in 2022 is taxable, per the letter that accompanied the letter.  A 1099-NEC was subsequently issued by the state to the recipients of the payments.

In the document you cited and linked to, it specifically says the people eligible for the payment mentioned, must have been employed between March 2020 and July 2021 to qualify.  This was during the Covid-19 declared emergency. 

I could be wrong, but I'm pretty sure the change in status of this emergency effects whether or not this 2022 payment is taxable.

So I need this 1099-NEC thing to file them? Where/how do I get one? We never received one as far as I know. 

You should have gotten or will be getting one in the mail.  I got mine a few days ago.  

But I dont know how to file the 1099 correctly.  It seems very strange.  Im waiting for Turbo Tax to re-open to ask them about it over the phone.  Every time I try to add the 1099 into Turbotax, it makes me create a small business profile and then applies a small business tax credit.  

To report this so it doesn't appear as a business, please do the following.

1. Sign in to your TurboTax account.
2. Click on Federal Taxes tab.
3. Choose Wages and Income.
4. Scroll down to Other Common Income
5. Select 1099 -NEC
6. Enter the 1099 NEC information'
7. Then it asks for the description of the income. Give it the proper description.
8. When you reach a page that says Does one of these uncommon situations apply? 
9. 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).
10. This will then be taxed as common income and not business income.

Now according to the federal government under payments first responder guide, this payment isn't taxable so lets exclude this by;

1. Click on Federal Taxes tab.
2. Choose Wages and Income.
3. Scroll down to Less Common Income and click Start to to right of Miscellaneous Income, 1099-A, 1099-C.
4. Go to other reportable income
5. When you get to the description box, give it a description such as 1099 NEC offset under 26 U.S.C. § 139  
6. Record the full amount  of the 1099 NEC with a minus sign in front of the amount.  This will negate the 1099 NEC income.

@ryeclift 

Thank you!! It was driving me crazy!!

Thanks, I got it entered without having to say I'm a small business; HOWEVER, (and I could be wrong) I believe this income is indeed taxable.  The federal statute you referenced is regarding repayment for losses incurred as a result of a "qualified disaster".  Are you sure this payment applies?

I recall the letter that accompanied the payment from the state, and it said that it was taxable, and as a result of that taxable status, the state included a larger check than what was promised.  It explained that extra money  was intended to offset the cost of the federal tax.  I dont have the letter anymore but it was definitely telling us the money was taxable.

What do you think?

Well, I want it to be non-taxable because it feels like it should be but I'm afraid you're right @ryeclifft.  The IRS says that if income is not expressly ruled non-taxable then it is taxable.  

So I would follow the first part of @DaveF 's instructions and enter it as other income so it doesn't have to have self-employment tax paid on it and then go ahead and leave it there.

@ryeclift  @samanthabaugus 

Steps 1-10 are the correct way to enter this form this year as those are taxable wages by FL regulations this year.

Even though I received a 1099-NEC.

Thanks it works

I have a client who received a 1099-NEC from State of Florida First Responder Payments Program in the amount of $1338.77 with federal withholding of $1338.77...hmm. My question is this is a one time thing and ProSeries wants you to check Schedule C or Schedule F which is neither and if I select Other Income then no SE tax...is that correct?

I received the same. I reported it, and they issued a corrected 1099-NEC. $1,388 in income, and zero withholding for taxes.

Yes, by selecting other income, there is no SE tax requirement.  There will be other qualifying information to enter such if you have the intent to make money. If you answer no to this, then there is no SE tax requirement as well. 

What government department did you get this from? We have moved and since government agencies never talk to each other, I suspect that it was sent to the wrong address (amusingly the check came to our new address but not the tax documentation). So I have to figure out who to contact. This is really proving more trouble than it is worth. 

Thanks. 

@DaveF1006 We received a 1099-NEC form and were told that this payment was taxable.  How do we file this form to correctly be taxed?

To report your First Responder Recognition Payments as taxable income but not as self-employment select the following:

• Income
• Show More next to Less Common Income
• Start next to Misc Income
• Start next to Other Reportable Income
• Enter the amount of the money you received and the description.  

This will enter the income on line z of her Schedule 1 with a description which will then flow to line 8 of the 1040.  It will be taxed as ordinary income instead of self-employed income.  

@Vanessa A The option you described specifies not to include income from 1099-MISC. We were given 1099-NEC forms marked as Non-Employee Compensation. Is the process you described acceptable for 1099-NEC forms?