Covid relief reported on 1099-NEC

[tro40]

Received a 1099-NEC for covid relief funds that were paid out by the state of Georgia.  This supplemental payment was for early learning professionals and staff in Georgia. Known as POWER, for Providing Our Workforce Essential Recognition.  POWER is funded through federal COVID relief funds.

When I put the 1099-NEC into TurboTax, it gets reported on a Schedule C as business income for the self-employed.  I'm not self-employed, I work for a childcare business.  Georgia paid these funds out to thousands of people.  The funds were routed through a private company so that company issued the NEC.  Should these funds have been reported on a 1099-MISC or some other tax form?  Do I need to file it as is, under the Schedule C?  Thank you

[LenaH · Accepted solution]

No, this should not be on a Schedule C. You can receive a 1099-NEC form and have it flow to Other Income on your return. The 1099-MISC form is mostly now reported on a 1099-NEC, which is why you did not receive a 1099-MISC. 

To enter your 1099-NEC and have it flow to Other Income, please follow the instructions below:  

1. Open your return.
2. Search for 1099-NEC with the magnifying glass tool at the top of the page.
3. Click on the Jump to 1099-NEC link at the top of the search results. 
4. Click Edit next to your 1099-NEC.
5. Enter past the information as shown on your form. 
6. On the page Does one of these uncommon situations apply?, choose This is not money earned as an employee or self-employed individual, it is from a sporadic acitivity or hobby (this is not common).
7. Search schedule c with the magnifying glass
8. Use the trash can icon to delete any business populated
9. Your 1099-NEC will flow your income to Other Income (Line 8z of Schedule 1). 
10. Click on Tax Tools on the left hand side.
11. Click on Tools.
12. Click on View Tax Summary.
13. Click on Preview my 1040 on the left hand side.
14. Search for Schedule 1 - Additional Income & Adjustments to Income.
15. A description of your Other Income and the amount should be listed in Line 8z. 

[tro40]

Thank you so much @LenaH !  This helps a lot!