I got a 1099-misc for a spiff at my job paid by the product supplier now it is having me file as a business?

[dharri7516]

i don't have a business name or address or code I don't have a business

[Hal_Al]

SPIFF (Special Performance Incentives for Field Force)  payments reported on Form 1099MISC; (1) are not treated as wages, (2) are not subject to federal income tax withholding, social security, Medicare, or federal unemployment tax, and (3) are not considered to be self employment income and, therefore, are not subject to self employment tax. http://www.irs.gov/pub/irs-pdf/p3204.pdf

 In TurboTax, Enter at:

- Federal Taxes tab

 - Wages & Income

  - Explore on My Own

Scroll down to

  -1099-Misc and Other common Income

      - Income From 1099-Misc

 On the  follow up screen,  enter SPIFF in the blank box, then on the next screen,  on the drop down list, check “This was  a Manufacturer's incentive payment”

This will put it on line 21 of form 1040

[TINAA0225]

Hi there, I have a few 1099-MISC to enter for SPIFFs, and I'm following your instructions up until " On the follow up screen, enter SPIFF in the blank box..." I don't see that part as an option. Can you please help? Thank you!

[ColeenD3]

To enter a SPIFF with a 1099-MISC:

While in your return, type “1099-misc” in the Search box and then select the “Jump to” link. This will take you directly to the section where you can enter your 1099-MISC.

On the  follow-up screen,  enter SPIFF in the blank box, then on the next screen,  on the drop down list, check “This was a Manufacturer's incentive payment”

This will put it on line 21 of form 1040

Please see the screenshot below.

[Vgarguilo]

The federal return is corrected with these steps, but my Pa return is asking me to complete a gross compensation worksheet like I am self employed.  How do I complete this form?

[ThomasM125]

You may need to start the state return over, as it appears it did not updated properly when you changed the form 1099 entry in the federal return.

[caldernv]

Thanks for replying.  In the turbo tax I am using, I followed the direction you gave me however when I got to the 1099 misc page it asks who paid you. Then it asks to add the federal ID. I can't get to the other page you mentioned 

[KathrynG3]

Try these steps:

• From the left menu, select Federal
• Now you will be on the Wages & Income screen. Scroll down to Income from Form 1099-MISC and click Edit/Add
• Delete the prior 1099-MISC entered by clicking the delete trash can icon next to it, and clicking yes, to confirm.
• +Add another 1099-MISC
• Only enter the payer and the dollars in the box as you received it - do not select either option for How is your payer's federal ID number formatted.
• The next screen is for a description where you can write in something such as SPIFF
• Then you will see the Does one of these uncommon situations apply? screen. Select This was a manufacturer's incentive payment.

@caldernv

[toddjmcdevitt]

@KathrynG3 , I have entered the 1099-misc as described (box 3 amount, put SPIFF in for reason & manufacturer's incentive) which is reporting correctly on line 8 of schedule 1 according to IRS publication 3204.  Turbo Tax is forcing me to complete a Schedule C to complete my tax return, which I shouldn't have to complete.

[DavidS127]

Look for an "extra" Form 1099-MISC and an associated "Schedule C" in your TurboTax.  Use the "Delete a form" feature to delete any 1099-MISC that is not for the SPIFF you received, and any unnecessary Schedule C.

If you are using a Download/CD version of TurboTax, you can do this in Forms mode (icon at top right in blue bar).

Here's how to delete your form in TurboTax Online: 

1. Open or continue your return in TurboTax.
2. In the left menu, select the dropdown arrow next to Tax Tools and then underneath that Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

Click here for the full article on deleting a form in TurboTax.

[meaganrz]

I see this is a little older thread but still applies. My tax return is dropping significantly after only adding a SPIFF 1099MISC. I added exactly the way you mentioned. After reading above, I thought it was non-taxable so shouldn't my return remain the same? Thanks.

[DMarkM1]

SPIFFs are taxable income.  You just will not pay the self-employment taxes (Social Security/Medicare) on that income.  The issuer also does not withhold income taxes on the payments meaning you will pay the income taxes via your tax return or quarterly tax payments if you choose.

Entering the SPIFF as noted above should avoid a Schedule C generating as well as any self-employment tax forms.  You can check your forms view in TurboTax online:  Look for business income on line 8 and self-employment taxes on line 23.  

1. Click "Tax Tools" in the left hand menu
2. Click "Tools"
3. Click "View Tax Summary"
4. Click "Preview My 1040" in the left hand menu

[moparman61]

I'm a little confused by one thing.  Wouldn't you want to file a schedule C for this SPIFF money so you can deduct any expenses incurred earning the SPIFF?   Thank you.

[JamesG1]

The IRS addresses this income in this IRS publication.

IRS Publication 525 Taxable and Nontaxable income, here, page 35 states:

You must include as other income on Schedule 1 (Form 1040), line 8z (or Schedule C (Form 1040) if you're self-employed), incentive payments from a manufacturer that you receive as a salesperson. This is true whether you receive the payment directly from the manufacturer or through your employer.

@moparman61 

[moparman61]

Thank you.  Yes, I put the income on Schedule C and claim expenses incurred earning the money.