Employer settlement on 1099-misc. TT making it self employed income

[sheltie]

I got a settlement from my former employer which was reported on a 1099-misc.  TT has now created a self employment tax credit in Schedule 1 line 14.  This does not seem correct and has created a bunch of downstream issues for identifying a business name and type.  This all happened after a recent TT update, as before this was not an issue and was not generating errors.  What should I do?

[ColeenD3]

Schedule 1, Line 14 is not a credit. It is one-half of your SE tax. If this is for compensation for wages, it is reported on Schedule C. The business name is your name. If it is some other type of settlement, see the link below.

Settlement

[sheltie]

See below reply

[KrisD15]

Delete the 1099-MISC you entered as Self-Employment (it isn't)

Enter the 1099-MISC under "Other Common Income" 

Select "Form 1099-MISC" and Click Start

Enter the 1099-MISC

Enter the reason as "Back Wages" 

Select "This money was from a lawsuit settlement" "yes" for back wages and enter that amount. 

[sheltie]

I deleted it and reentered it as instructed.   I am still getting the 6 errors for filling out the SE information.  The person above said to just enter my name for my business but this is also asking me for my business code which it says comes from Schedule C which turbo tax has not created.     I can see now that this is a new (to this file) CA form 3514.

[KrisD15]

Are you entering this on the Federal screen

Delete the Schedule C if one was started:

Sign into your account and go into the return

Open the “Tax Tools” drop-down on the left side bar

Click on “Tools” on that drop-down

Click Delete a form (the third one down) on the “Tools Center” screen

Scroll down and click “Delete” next to Schedule C

also look to see if there is a Schedule C Worksheet and delete that as well. 

[Carl]

Deleting the incorrect 1099-MISC entry is not enough. A SCH C has been created. You need to delete it. The only way to do that is to go into the Business Income & Expenses (SCH C) section of the program, and delete the business that is listed there.

[skoka]

I am having the same issue described in the post. I got a settlement from my former employer which was reported on a 1099-misc.

The Schedule SE-S form get generated each time I enter the 1099-MISC details in my turbo tax desktop app.

I am following all the instructions listed in the post

1. Enter the 1099-MISC under "Other Common Income" 

2. Select "Form 1099-MISC" and Click Start

3. Enter the 1099-MISC

4. Enter the reason as "Back Wages" 

5. Select "This money was from a lawsuit settlement" "yes" for back wages and enter that amount. 

The Schedule SE-S gets generated automatically. 

I remove the 1099-MISC form from W2, then the Schedule SE-S gets deleted automatically. 

What steps should I take so that Schedule SE-S is not generated?

[ThomasM125]

What you describe would likely be considered back wages. It would normally be reported on a W-2 form and have social security and Medicare tax withheld and paid in. Since it wasn't reported on a W-2 form with no payroll taxes paid in, TurboTax is treating it such that payroll taxes can be paid in in the form of self-employment tax. Both payments go toward your social security retirement.