2019 EIC Issue with Settlement Value and form 3514

Forum|Forum|6 years ago
February 9, 2020
1 reply
22 views

This year I received a settlement for back wages. This entered from form 1099 MISC. It is a lawsuit type income which the software asked and I entered correctly. During California 2019 return, I qualified to the EIC being under 30,000 even with the settlement. The software inaccurately inputs the value as self-employed money. THIS ISN'T CORRECT. Regardless I delete Form 3514, forgo my ~$40, go to print to mail, and the form regenerates on its own half filled out. This puts me at risk for audit due to the bug. Please advise on how to proceed.

KrisD15

Level 15

Here is a copy of the steps so you can be sure it was entered correctly:

Sign in to TurboTax and open or continue your return.
Search for 1099-misc and select the Jump to link.
If you're asked Did you get a 1099-MISC?, answer Yes.
1. If you've already entered a 1099-MISC, select Add Another 1099-MISC.
Input the information from your 1099-MISC and select Continue.
On the Describe the reason for this 1099-MISC screen,type in lawsuit settlement and select Continue.
On the Does one of these uncommon situations apply? screen, select This was money from a lawsuit settlement and then answer the back wages question before selecting Continue.

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MrFumoAuthor

Level 2

I appreciate your response. I think it may have helped to read a tad more closely. I already did the federal part just fine following the steps you posted for me. Software worked beautifully for Federal 1040. The 540 section however is the issue. Nowhere in the CA 540 does it ask about 1099-MISC. It automatically reads from Federal 1040 and imports my LAWSUIT earnings as SELF EMPLOYED BUSINESS earnings which is why I can't complete the EIC 2019 despite myself qualifying. I try to remove the auto-generated 3514 to ignore my credit given the bug in the software. I switched to forms>then 3514>then delete form. The software automatically regenerates the form when I go to the mail in return section. I literally watch the green refund numbers change as I go to print return for records and filing.

There is no where for me to report bugs in the software so I'm on here trying to get my return done in such a way I won't be audited. It's not worth the 40$ to me to run that risk, and I'd prefer to use the software I paid (ironically) $40 for at Costco.

MrFumoAuthor

Level 2

UPDATE: 4/24/2020

I have again verified it is entered as LAWSUIT. I switched to forms to verify it shows boxes other income checked (1099-MISC >Box 3>other income and back wages from lawsuit ) It would be fantastic to see an update patch this bug, so I can reduce my risk of audit.