Hello folks!
Seeking your kind assistance on a 1099 Misc issue. My wife is a retiree from a public agency and as part of their union agreement, the agency pays her $200/month ($2,400 per year) and is termed as "Medical Benefit" in their union handbook as part of their Bargaining Agreement. She is to receive this until she turns 65 and is eligible for Medicare. This amount is reflected in box 3 for 1099-Misc. It does not fall under any of the categories listed, ie gambling proceeds, settlements, etc. I am at a loss as to how to treat it. We can obviously use the monies for anything, but we certainly use it to help us pay for our medical insurance premiums. I thought of listing it as a self-employment income, which it is obviously not......HELP!!!
Thank you so much!
If you receive a form 1099-MISC for a medical benefit, then you are not considered as self-employed and do not need to file a Schedule C.
In TurboTax, enter your form 1099-MISC and follow the interview until you arrive at the page titled Did this involve an intent to earn money. Answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not 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 receive the 1099-MISC only in 2019, not in previous years and not in 2020, you will then have the screen where you can say that it did not involve an intent to earn money.