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Anonymous
Not applicable

How to submit a 1099-MISC for a tax break, not for work?

My town gives me and my fellow members of the volunteer fire department a tax break on our town real estate tax. This is reported to us as "other income" on a 1099-MISC. However, when I try to submit this, TurboTax seems to think I can only be a contractor. I am not.
This is purely a token of gratitude from the town (and to help with retention of trained firefighters!) but since it has value it has to be reported. I am not a professional firefighter, and this is in now way related to my main job which is reported on a W2.
How do I file this?
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2 Replies
MinhT1
Expert Alumni

How to submit a 1099-MISC for a tax break, not for work?

If you receive a form 1099-MISC for a financial assistance, then you are not considered as self-employed and do not need to file a Schedule C.

 

In TurboTax, enter your form 1099-MISC and follow the interview until you arrive at the page titled Did this involve an intent to earn money?. Answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not be subject to Self-employment tax.

 

In TurboTax, there is a work-around. Say that you only receive the 1099-MISC only in 2020, not in previous years and not in 2021, you will then have the screen where you can say that it did not involve an intent to earn money.

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Anonymous
Not applicable

How to submit a 1099-MISC for a tax break, not for work?

Thanks @MinhT1 - that did it (eventually).

 

The problem was I selected 'yes' to had I got this in 2019 as I had, but this sent Turbo off down the self-employed route.

 

If I only select earned in 2020 it finally shows the 'intent to earn' question. Once I selected that I did not have intent Turbo was happy to just note the income.

 

Thanks for pointing me in the right direction.

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