Hello.
I received a form 1099-NEC. The funds that I received came from a grant issued from the city to make home repairs. I'm not quite following why this is considered what it is. The software is asking questions about the business and what it is, but there was no business/business start date and the funds were used to pay a company to make the repairs.
A Form 1099-NEC is issued to report Non-Employee Compensation. Although you may not consider yourself a "business", the IRS considers anything reported on a form 1099-NEC to be self-employment income. Grants are generally considered to be business income, not personal income.
Therefore, you will have to report the amount on a Form Schedule C (Profit or Loss From Business).
You can deduct any expenses related to your grant activities for which you received the 1099-NEC for. These expenses can be deducted on your Schedule C.
Click here to find out more information about this in the TurboTax article: How to File Taxes with IRS Form 1099-NEC.
Click here for IRS information on Grants to Individuals.
Here is another way to enter this. It does not look accurate because it is not lawsuit, but it will put the correct information on your return and not try to make it a business.
Go to Wages and Income
Then Less Common Income
Pick the lawsuit option and answer the questions
This will report the income, put it in the correct place on your forms and not require you to report as a business. TurboTax used to have an option to report a grant but it does not seem to be there this year. If someone finds a better way, please post that. The IRS will not see anything about a lawsuit. This is just a workaround to report correctly.