1099-misc Other income

[mmbowm]

An auto dealership service advisor doing their regular job receives a sales bonus from another auto manufacturer as part of a promotion.  It's reported on a 1099-Misc  on line 3 as other income.  How should this be reported?

[CatinaT1 · Accepted solution]

This is a common thing and sometimes referred to as a "SPIFF". The payment is treated as miscellaneous income and is not subject to Self-Employment Tax.

Since it’s on a 1099-MISC Box 3, the goal is to get it to land on Schedule 1, Line 8z (Other Income) of your 1040.

Follow these steps:

1. Go to Federal > Wages & Income.
2. Scroll to Other Common Income and select Income from Form 1099-MISC.
3. Enter the 1099-MISC exactly as it appears (Box 3 amount).
4. For the description, enter "Manufacturer Incentive Payment" or "SPIFF."
5. On the "Does one of these uncommon situations apply?" screen, select None of these apply.
6. On the "Did the [Payer] involve work like [Your Name]'s main job?" screen, you must answer NO. Even though it’s related to your field, you are an employee of the dealership, not an independent contractor for the manufacturer. Answering "Yes" triggers the self-employment tax.
7. On the "Did [Your Name] get [Payer] income in 2025?" screen, select Yes, I got it in 2025.
8. On the "Did the [Payer] involve an intent to earn money?" screen, answer NO. (This confirms it was a one-off promotion/award, not a business you are running).