1099-MISC Contest Winnings

[mclayton]

I won a contest and received $500 and thus received a 1099-MISC. The only options TurboTax is giving me is royalty investment income or royalty income. I don't have a business for this, but Turbo Tax is now wanting me to enter a business?  How can I report this as prize money and not income as I don't have a business.

[MinhT1 · Accepted solution]

If you receive a Form 1099-MISC for a contest winning, then you aren't considered ‌self-employed and don't need to file a Schedule C.

In TurboTax Online, enter your form 1099-MISC by following these steps:

1. Open your tax return
2. Click Federal in the left-hand column then on Wages & Income
3. Locate the section Other Common Income and click on the down arrow on the right
4. Click Start next to Form 1099-MISC
5. Follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this didn't involve an intent to earn money. The amount will be reported as Miscellaneous income and won't be subject to Self-employment tax.

In TurboTax, there is a work-around. Although you may receive this income every year, say that you only received the 1099-MISC in 2023, not in previous years and not in 2024, you will then have the screen where you can say that it didn't involve an intent to earn money.

[rjs]

There is a specific line on Schedule 1 for prizes and awards, line 8i.

Which box of the 1099-MISC is the $500 prize in? It should be in box 3. If it's in box 2, which is royalties, that's a mistake and you should ask the payer to give you a corrected 1099-MISC. If it's in box 3, but you entered it in box 2 in TurboTax, that's your mistake. Go back and enter it in box 3. Then you will have other options, one of which is "This was prize winnings." When you select that option you won't get any of the other questions that MinhT1 mentioned, and TurboTax will put the prize in the correct place on Schedule 1 line 8i.