1099-MISC for past rewards

[tpang]

Hello,

My student loan institution closed down in 2024 and moved my loan to another institution. They provided me with a 1099-MISC in 2024. It is a cash reward, due to good grades. I received the cash back in 2021, 2022, and 2023. None in 2024. The 1099-MISC has lumped all my cash rewards over the years since they closed down and reported it this year. When I spoke to them, they said ideally they would have spread the cash rewards over the years.

When I enter my 1099-MISC I get taxed a lot since its a lump sum vs. the smaller amounts over the year. Assume the financial institution cannot help me.

Can someone guide me on how to report this accurately? It is not a personal business and I feel I should not be taxed since the amounts have been less than $600 over the years vs lump sum this year.

[DianeW777]

Yes, you can report this as other income. Since you actually received the money in 2021, 2022 and 2023 you could amend those tax returns to include each year what you actually received. Instructions for doing that are listed below. 

If  you do decide to amend the prior years and there is any tax balance due, there will be interest and penalty for late payment.  The 2021 should be filed first and before April 15th just in case you have a refund coming. 

•  How do I file my 2023, 2022 or 2021 Tax Return? 
  • You would report the income the same way as shown below for 2024.

To report the income in 2024, without any business activity associated with it, you can use the steps below.

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section 
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount

[tpang]

Hi DianeW777,

I have reported this correctly in the past years as other income so I don't believe I need to file an amend.

My concern is that I have already paid taxes on them over the past years. And now if I file it for 2024 I will be paying taxes again.

Filing under Miscellaneous Income will incur a tax I believe.

How can I make sure I am filing correctly and not paying taxes twice?

Thank you.

[BrittanyS]

If I understand you correctly, you received a lump sum 1099-MISC for cash rewards that a portion of rewards were already claimed on your previous year returns.  If you received a 1099-MISC for 2021, 2022, and 2023 and the 1099-MISC is a duplicate of those payments, you will need to contact the issue to have them issue a corrected 1099-MISC.  You will need to at least attempt to go through the issuer to correct the form.  If you are unsuccessful in getting a corrected 1099-MISC, you can contact the IRS at 1-800-829-1040 for assistance.  The IRS will contact the payer about the form.  If you are unable to get a corrected 1099-MISC by the filing deadline, you should still file a tax return with what your correct income should have been for 2024.  

If you did not receive a 1099-MISC for the previous years, you can follow the process about to have the 1099-MISC issued for the correct years or you can amend your previous years and remove the 1099-MISC reported.  You will receive a refund for the years you added the income to.  Once your amended returns have processed and have been accepted, you will enter the 1099-MISC for the lump sum on your 2024 tax year.  

@tpang