Do I have to report 1099-MISC box 6 as self employment income? If not, where do I enter the income?

[zombitroid]

I got a 1099-MISC for reimbursements I was paid by a medicaid program for participation and attending meetings / voting on stuff. they say they can't give me tax advice, but i have about $1500 in box 6 income ( "medical and health care payments" ). No other boxes are filled / checked

Where do I enter this income in turbo tax deluxe desktop for windows 11? I tried putting it in the 1099-MISC section but that section forces me to create a "business" for this income.. its not a business for me

I also tried scrolling down to less common income and entering in the 1099-C / 1099-A income section, but turbo tax directly says do not put 1099-MISC income here , which mine is. Some sites recommended putting it in this less common income section with the description of 1099-MISC "Box 6 Medical Payments"

Please help! Greatly, greatly appreciate every response

-Jeff

[zombitroid]

I'm trying to avoid the self-employment / business tax, and just pay normal taxes on this income

[JohnW152]

This really doesn't sound like self-employment-type income, but because it's reported in Box 6 of Form 1099-MISC, the TurboTax program (and, presumably, the IRS) expect that it is self-employment income.  I'd suggest that you contact the issuer to have the income recategorized as Other income in Box 3.  Entering income in Box 3 doesn't necessarily trigger self-employment tax.

According to Box 6, Medical and Health Care Payments in the Instructions for Forms 1099-MISC and 1099-NEC (Rev. January 2024), which is the tax guide that Form 1099-MISC issuers are supposed to follow:

Enter payments of $600 or more made in the course of your trade or business to each physician or other supplier or provider of medical or health care services. Include payments made by medical and health care insurers under health, accident, and sickness insurance programs…. Payments to persons providing health care services often include charges for injections, drugs, dentures, and similar items. In these cases, the entire payment is subject to information reporting. You are not required to report payments to pharmacies for prescription drugs.

That really doesn't seem to describe your activity.

That being said… here's how Form 1099-MISC Box 3 information is entered so it doesn't trigger self-employment tax:  

1. Open TurboTax Online
2. Select  Tax Home in the left pane
3. Select the dropdown to the right of Wages & Income
4. Select  Pick up where you left off, Review/Edit or the edit pencil
5. On the Great! We've got your income info page, select the dropdown to the right of Other Common Income -- Tax refunds, 1099-G, 1099-NEC, 1099-MISC, 1099-K
6. Select Start to the right of Form 1099-MISC
7. Select Yes on the Did you get a 1099-MISC? page
8. Enter the information from your 1099-MISC on the Let's enter the income from your 1099-MISC page, then select Continue
9. On the Describe the reason for this 1099-MISC screen, enter [description], then select Continue
10. On the Do one of these uncommon situations apply? screen, select the bullet next to None of these apply, then select Continue
11. On the Did the [description] involve work that's like [your] main job? page, select the bullet next to No, it didn't involve work like [your] main job, then select Continue
12. On the How often did [you] get income for [description]? page, answer appropriately, then select Continue
13. On the Did the [description] involve an intent to earn money? page, select the bullet next to No, it didn't involve an intent to earn money.  This indicates to the program that this wasn't self-employment income, so self-employment tax won't be triggered.  Select Continue
14. On the Your 1099-MISC summary page, select Done, unless you have more Forms 1099-MISC to enter

If the TurboTax Online navigation described above doesn't look like what you're experiencing, see the TurboTax Help article Why does the TurboTax navigation menu look different for me?.

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[zombitroid]

I will ask my issuer to recharacterize as box 3, I'm not sure if they will do it

Are you sure there is no way to recharacterize the box 6 income as just miscellaneous income?

[JohnW152]

No.  Box 6 will always trigger self-employment tax.

Again, I think you have a strong case if you contact the issuer.  Just cite the quote that I gave you from the instructions.

[zombitroid]

Update: they  agreed to recharacterize the income as box 3. Anything else I should know going forward to report this box 3 income now? will turbo tax let me avoid the self employment tax? how does this work...

and thank you! i'm shocked they agreed to recharacterize it

[RobertB4444]

Going forward you will report the 1099-MISC just as it is written.  You will tell the TurboTax system that it did not involve work like your main job, that you only received it in 2024 and that it did not involve an intent to earn money.  Then the amount will be added to your return but you will not have to pay self-employment tax on it.

@zombitroid