Categorizing my 1099-NEC income- severance pay but I was never an employee

[ahoh9]

I received a severance payment from a company, and they sent me a 1099-NEC form. I've seen this question asked before, but my situation may have been a bit different. 

I was laid off from the company between when I accepted the offer and my start date, so I was never an employee of the company. 

How would I categorize my 1099 income? Is it still income that should've been on a W2, even though I was never an employee of the company? I feel like none of the options really fit

Self-employment income

Farm income

Hobby

Lawsuit settlement

Medicaid waiver payments that qualify as difficulty of care

Income that should've been reported on a W-2

Thank you!

[DawnC]

If you were never employed, what did you get severance pay for?   It sounds like you should select None of the Above there, and file a Schedule C to report that self-employment income.   Selecting none of the above is the same as selecting Self-Employment income.  

You can claim business deductions from that income.   When you set up the Schedule C, use your own name and your home address as the business address.   For the purposes of the 1099-NEC, you are the business owner and the issuer of the 1099-NEC is your customer/client.   

[ahoh9]

Thank you, Dawn! They laid me off after giving notice to my employer at the time, so they said the payment was a severance. There isn't a "none of the above" option, so I guess self-employment would be the best selection? If I select that, am I required to set up a Schedule C, or only if I'm claiming business deductions?

[ThomasM125]

Since the work was associated with a salary job, it would likely be considered self-employment, as opposed to "Other"  income by the IRS. As such it would be best reported on a schedule C as self-employment income. You are required to complete the schedule C if you report self-employment income even if you don't have any business deductions.