Form 1099-NEC -- business or hobby?

[KolacheKowboy]

My daughter received 1099-NEC from Amazon for $15k (related to her Amazon storefront account). My daughter is under 26, enrolled as a full-time student, and had about $9k of W-2 wages. Me and wife file MFJ and will claim daughter as a dependent. Daughter did not create/setup a business. Is this treated as "hobby income" or "business income"? And based on answer, where/how do I enter this income in Turbo Tax?

[ee-ea]

Businesses make a profit, hobbies sometimes do but most often do not.  Here is the IRS's instructions to agents on how to make the call.   https://www.irs.gov/pub/irs-utl/irc183activitiesnotengagedinforprofit.pdf

[KolacheKowboy]

If it's a business, then the 1099-NEC info will need to be entered on Schedule C in Turbo Tax, yes?

[AnnetteB6]

Yes, Schedule C is for self-employed business income and expenses.  

To learn more, take a look at the following TurboTax help article:

What Is a Schedule C IRS form?

@KolacheKowboy 

[Hal_Al]

 @KolacheKowboy  said "My daughter is under 26.....Me and wife file MFJ and will claim daughter as a dependent".

Although 26 is the age for being on parent's health insurance, 24 is the age for being a dependent. If your daughter was 24 or older , on 12-31-22, she cannot be your dependent.

There are two types of dependents, "Qualifying Children"(QC) and Other ("" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test. Only a QC qualifies a taxpayer for the Earned Income Credit. They are interrelated but the rules are different for each.

If she is over 23, she cannot be a QC because of age. She cannot be Qualifying Relative because she had more than $4400 of income .

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

[KolacheKowboy]

Daughter was 20 for 2022 tax year. Thanks for the clarification!