I receive 1099-nec instead of 1099-inc from count for rental property because of the rental assistance program

[echotoy]

My tenant applied the state rental assistance program. And the count sent me a 1099 DEC form instead of MISC. Should I fill the 1099DEC form in turbo tax or I can still put it as rental income?

If put into as rental income, how should I do it?

Thanks a lot for help!

[DavidD66]

There are a couple of ways you can deal with this.  You could enter the 1099-NEC as it is printed.  This will result in your creating a Schedule C, and you can then report an expense for the same amount as the 1099-NEC.  That will result in your Schedule C showing zero net income.  Then just report the amount of rent you received.  You don't have to have a 1099-MISC to report your rental income.  If you are using TurboTax Online, you will have to use the Self-Employed version in order to enter an expense on your Schedule C.   You could also just not report the 1099-NEC.  If the IRS contacts you about not reporting it, you can explain that it was misreported to you, and that the income is properly reported on your tax return as rental income. Finally, you can contact the issuer and request that they issue you a corrected Form 1099 MISC.  

[echotoy]

Thanks for your reply.

I am using a downloaded TT version on Mac. Can I upgrade it or I have to purchase a new Self-Employed version?

[PattiF]

You can enter the information on Schedule E and not enter Form 1099-NEC at all. If your rental is reported on Schedule E there is no need to add Schedule C or upgrade. Include the income on Form 1099-NEC as rental income. Keep the form in your records. 

As @DavidD66 said if the IRS contacts you about not reporting it, you can explain that it was misreported to you and that the income is properly reported on your tax return as rental income.

@echotoy 

[echotoy]

If I want to offset the income in 1099-NEC in Home&Business TurboTax version, which item I should use to put the offset amount and description that I report the income as rental income? Thanks!

[JamesG1 · Accepted solution]

Select Other miscellaneous expenses by following these steps:

• Down the left side of the screen, click on Federal.
• Across the top of the screen, click on Income & Expenses.
• Scroll down to Self-employment.  Click Show more.
• Click on Start / Revisit to the right of Self-employment income and expenses.
• At the screen Your 2022 self-employed work summary, click Edit.
• At the screen Here's you info, click Add expenses for this work.
• Select Other miscellaneous expenses.

@echotoy