How Do I Enter The California Retention Payment Form 1099-NEC

[jeff_shankle]

Hello Customer Support,

I received a 1099-NEC for the California Retention Payment of $1000 and when I add it to the MISC 1099-NEC section I then am asked questions about the type of self-employment work I do. This is considered a bonus and not self-employment, do I need to add it.

Thanks,

[PatriciaV]

Yes, according to the State of California, Clinic Workforce Stabilization Retention Payments are taxable to the employee.

You may report this as "Other Income" on your tax return. 

1. Start in Federal Taxes >> Wages & Income >> Other Common Income >> Income From Form 1099-MISC. Click "Start" and work through the interview.
2. After entering the info from the 1099-MISC, continue until you see the question about this being connected to your main job, and say "no." 
3. Check only the box for 2023 income. 
4. Then answer that this was not an "intent to make a profit." 
5. Those three answers should classify this as "Other Income", which will appear on Line 8 on Form 1040.