1099-NEC for Sales Commission

[DadAccountant]

Hi, my son works for a company that sells mowers.  He received a w-2 from this company.  He also received a 1099-NEC from the wholesale distributor for sales commission received from the distributor for sales performed as a part of his regular job.

When adding the information to turbo-tax, the options to choose are shown below.  None of the options seems to really fit his situation.  When he selects the self employment, he has to create a Schedule C, which does not seem correct.  The amount of compensation is only $800.  Can someone please advise the best way to handle this situation. Thanks.  

[Vanessa A]

It depends.  Does he regularly receive this commission from the distributor or was it just a one time "Thank You" payment?

Since the distributor is not his employer, if he is working to earn money from the distributor, then this would be included on the Schedule C as self-employment income.  

If this was just a one time thank you payment, then you can select Hobby which will just report it as Other income and it will not be subject to Medicare and social security taxes, just regular income taxes. This does not tell the IRS it is hobby income, it just tells TurboTax where to report the income.