Box 3 is filled on my 1099-MISC for a settlement for unpaid Commission for a project bid from my last employer. Can you please guide me to report this income ?

[ashahpatel80]

I do not have a business or i am not self employed . I worked as a project estimator with that employer and i was supposed to be  paid wages Plus commission for a bid which get awarded.

[LenaH]

If wages are reported on a 1099-MISC in Box 3, then you will still need to pay the uncollected Social Security and Medicare tax, as well as the income tax. If you enter the 1099-MISC, it will likely populate under a Schedule C and add self-employment tax on the income. This will end up being your portion of the Social Security and Medicare. 

The IRS classifies these wages as supplemental wages, along with bonuses, severance pay, taxable fringe benefits, vacation pay, back pay, and overtime. Supplemental pay is anything other than your regular pay. Typically, supplemental wages are added to a W-2. However, there are different withholding methods for supplemental wages that the employer can consider, which are discussed in IRS Publication 15.

Per the IRS, regardless of the method employers use to withhold income tax on supplemental wages, supplemental wages are subject to Social Security and Medicare taxes. 

To enter your 1099-MISC in TurboTax, please follow these steps:

1. Open your return.
2. Search for 1099-MISC with the magnifying glass tool at the top of the page.
3. Select the Jump to 1099-MISC link at the top of the search results.
4. Enter your 1099-MISC.
5. Answer all the questions on the screens that follow. 

[ashahpatel80]

This was settlement for unpaid commission for a project bid i prepared while working with that employer. 

is  it considered as a supplemental  wage ?

Would you be able to provide answer all question on screens so that i don't have any problem filing it ?

1.Does one of these uncommon situation applies ?

1.Did the Commission involve work that's like Spouse's main job?

Do i need to add expenses for this work ?

[JohnB5677]

Since it's in Box 3 I expect you did get paid, and it is not necessarily supplemental income, but it is taxable income.  Because you explained that this is something you do regularly, it will be subject to the self-employment tax.

To post the 1099-MISC

Start with Income & Expenses

1. Scroll down to Other Common Income
2. Select Form 1099-MISC from the drop-down
3. Did you get a 1099-MISC? = Yes
4. Let's get the info from your 1099-MISC = Post your information
5. Describe the reason for this 1099-MISC = Commission settlement
6. Does one of these uncommon situations apply? = None of these apply
7. Did the involve work that's like your main job? = From what you've said = Yes
8. Guess what? You can deduct expenses for the nonemployee compensation work
9. You do not have to enter expenses, but it may help your tax situation
10. Let's confirm the reason for this income = If you have a business you can add to it, or enter an alternative
11. Did you get another 1099-MISC for XXXXX = Yes/No
12. Now continue through the interview.