1099-MISC causes 9 errors in federal return. Multi-year problem

[flstockman]

Hello,

I get a $250/month health insurance subsidy from my county as a retired employee, and receive a 1099-MISC for $3,000.  When I try to put it in TurboTax using the Step-by-Step method and describe it as "retiree health insurance subsidy", TurboTax starts trying to treat it as a business and creates a schedule C, which I wouldn't otherwise have, and starts asking about business expenses and other things that are totally inappropriate based on what it is.  I would greatly appreciate advice on how to put it in as the simple thing it is. Thank you!

[MindyB · Accepted solution]

No, don't create a business. I suggest you delete the 1099-MISC you have entered, and anything that was created in the self-employment section and start fresh. Here is how to report the 1099-MISC:

• Navigate to Federal > Wages & Income > Other Common Income> Form 1099-MISC> Start or Revisit
• Enter the 1099-MISC as printed, Continue
• Describe the reason for this 1099-MISC: "Retiree health insurance subsidy" or similar.
• 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 Retiree health insurance subsidy.  Select only the year of this specific 1099-MISC, 2024.
• 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."

[flstockman]

That was perfect, MindyB!  I just followed your steps and ended up with no errors. I think one of the important parts of your answer was to delete the 1099-MISC in TurboTax and start from scratch.  It had been problematic last year as well, and the form carried over, so it still probably had elements from my 2023 and previous interview answers that caused TT to characterize it improperly.  Your step-by-step instructions were SO helpful.  I really appreciate your taking the time to do that, and with amazing speed!