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kjskms
New Member

1099 NEC

Received a 1099 NEC from a vendor where I received a debit card for meeting sales quota. Do I really need to fill out schedule C for self employed business?

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2 Replies
DaveF1006
Expert Alumni

1099 NEC

Yes, because it is a reward for a job well done.  It is compensation for services you performed during the year and now you are being rewarded with a bonus.. Please view this Turbo Tax source for further information on the treatment of bonuses and rewards. 

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Hal_Al
Level 15

1099 NEC

Q.  Do I really need to fill out schedule C for self employed business?

A. Maybe not. You, apparently,  have a SPIFF*, although a SPIFF is typically reported on a 1099-MISC, rather than a 1099-NEC

 

You have a couple of choices, in TurboTax (I would do #1):

1. Enter at the 1099-MISC screen. Put the amount in box 3. On the screen "Does one of these uncommon situations apply?", select "This was a manufacturer's incentive payment"

2. Enter at the 1099-NEC screen. On the screen "Does one of these uncommon situations apply?", select sporadic activity

 

 

*A SPIFF (Special Performance Incentives for Field Force) is a small, immediate bonus for a sale. Typically, "spiffs" are paid, either by a manufacturer or employer, directly to a salesperson for selling a specific product.

IRS Publication 3204 discusses spiffs for the auto industry, however the principal should apply to any spiff. 

SPIFF (Special Performance Incentives for Field Force)  payments reported on Form 1099MISC; (1) are not treated as wages, (2) are not subject to federal income tax withholding, social security, Medicare, or federal unemployment tax, and (3) are not considered to be self employment income and, therefore, are not subject to self employment tax. https://www.unclefed.com/IRS-Forms/2005/p3204.pdf

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