I received a 1099-misc but not self employed

[marivero]

What if it's a box 2 "royalty" but you are not self-employed? Tiny  payment for a book contribution over 20 years ago.

[DianeW777]

Be sure when you enter the royalty, you select 'Other' as the category.  When you complete your entry it will populate on Schedule E and not Schedule C.

Go back to your entry and delete it, then select Rental Properties and Royalties (Sch E) then choose 'Other' as the category and complete your 1099-MISC entry for your royalty income.

[Dick_Gram]

I had a similar problem in trying to do a deceased relative's taxes. She received a disbursement from her deceased husband's retirement account. She'd received it for multiple years. When I indicated that a Schedule C AND a self-employment tax were generated. Your work around of only reporting the income for 2021 worked that issue. Wish I'd seen that several hours ago.   🙂

[rjs]

@Dick_Gram 

A distribution from a "retirement account" should have been reported on a Form 1099-R, not a 1099-MISC. Entering a 1099-R in TurboTax would not have produced Schedule C and self-employment tax. Did you enter a 1099-R as a 1099-MISC?

What type of retirement account was it: a pension, annuity, traditional IRA, Roth IRA, 401(k), etc.?

[Jennypenny]

I see I'm not the only one having issues in TurboTax reporting royalty money (from my husband's deceased father).

The 1099-MISC is for under $200 and TT wants me to complete a Schedule E for an additional $150?

Are small amounts of royalty income not reportable?

[Vanessa A]

No, you must report all income from all sources if you are filing a tax return. So you will need to include the 1099-Misc on your return. 

 If you otherwise would not need to file and the $200 of interest was your only income, then you would not need to report it.

[Kyitos]

I'm having the same problem. And it never asks me if there was an intent to make money. Last year I had to manually remove some forms from turbo tax but don't remember what I did

[DawnC]

Assuming you have a 1099-MISC with an amount in Box 3 that is not self-employment, delete the entry you started and then reenter the form as follows to get it to show up as Other Income (Line 8 of Form 1040) not subject to self-employment taxes:

1. Go to Other Common Income - in the Personal or Wages and Income section (see image below) - don't enter in Business or Self-Employment section
2. Income From 1099-MISC
3. Answer YES or Add Another 1099-MISC if you have others entered (you can delete the one linked to a business here too)
4. Enter the Payer name, Fed ID #, and Box 3 amount
5. Describe the reason > imputed income, research study, other taxable income, etc.
6. None of these apply
7. No - doesn't involve my main job
8. I got it in 2022 - - Mark only this box - you should only have 1 checkmark on this screen
9. No - doesn't involve the intent to earn money
10. Done - no schedule C required

If your situation is different, please advise @Kyitos    Also note, if you already started a Schedule C, the Schedule C and the previously entered 1099-MISC will need to be deleted to remove the error.   

How to Delete Schedule C

[Aerodan]

Thanks very much for this answer. You solved my problem. TurboTax needs to make this clearer. In my case, the money was a grant from our local utility because we live in a wildfire zone and the payment is to clear the underbrush back from the house. 

[enigmaticintx]

This is indeed a failure of the logic behind this section in Turbotax. I received a 1099-MISC for an investment that pays a quarterly coupon rate per contract. It is not a dividend, not interest, etc.. The investment firm reports it correctly on the 1099-MISC. The intent of the investment is INDEED to earn income. So when I truthfully answer that question "Did this involve an intent to earn money" by ticking the box, there should be additional questions as to what the money came from. Instead the silly program assumes (incorrectly) it's from self employment business. 

[Joannie2]

Thank for the advice.  It worked like a charm!

[Javman4socal]

I received a 1099-Misc with Box 3 filled in with a dollar amount. After importing the 1099 forms from the brokerage firm, Turbotax asked me a series of questions and treated the incidental income as self employment and calculated self employment tax liability! Whoa! After contacting Turbotax live help and no solution offered, I requested and viewed a FAQ link on 1099 topic. This contained the info I needed for a work around the tax software's series of questions re: the other income on 1099-Misc, Box 3. The solution was to answer "No" to the software's question as to whether an intent was present to make money in this activity. After answering the question accordingly, the software treated the other income amount NOT as self employment activity. A hearty thank you for this valuable tip! Just eFiled my tax return after spending a sleepless night fretting about this tax issue. Thank you!!! 

[MonikaK1]

I'm glad you found a solution. To clarify, a Form 1099-MISC with an amount in Box 3, Other Income, may represent a variety of income types. All income is taxable unless specifically excluded by law.

You can enter Form 1099-MISC and identify that it was not income from working so that it doesn't get misclassified as self-employment income:

1. Select Income from Form 1099-MISC under Wages and Income.
2. Enter the payer information and dollar amount
3. Enter a description for the payment
4. When asked about Uncommon Reasons, select that none apply or select one that adequately explains the reason
5. When asked about the frequency of payment, select received in 2023
6. When asked "Did (description) involve an intent to earn money?" answer No (that is, it is not earned income and therefore not subject to self-employment tax)

If the income you received was for something other than regular or recurring self-employment, you can enter the amount under Other Reportable Income. In TurboTax Online:

1. Go to Wages and Income
2. Scroll down to Less Common Income
3. Go to Miscellaneous Income
4. Select Other Reportable Income and follow the prompts. Enter a description of the reason for the payment.

If you regularly have income from self-employment, you should report the income on Schedule C and you can deduct ordinary and necessary business expenses.

See this TurboTax tips article for more information about self-employment and the gig economy.

[fcp3]

Tax year 2023, the 1099-Misc interview does not have the "No, it didn't involve an intent to earn money" question so the 1099 Misc I received for a solar energy incentive payment  triggered SE tax as it considered it employment income

Please suggest a work around.

I called the payment "manufacturers incentive" and SE tax disappeared. Using this workaround it is now listed as "other income " on the 1099 misc works form 

[ee-ea]

@fcp3 

This applies to Form 1099-NEC also.

Enter it in the personal section, Other Common Income Form 1099-MISC.  To ensure it does not go to Schedule C (self-employment), you will answer the follow-up questions accordingly. 

On the Describe the reason for this 1099-MISC screen, enter a description of the other income. (award/stipend)

Select None of these apply on the Does one of these uncommon situations apply? screen.

Select No, it didn’t involve work like my day job on the Did the involve work that's like your main job? screen.

Select I got it ONLY in 2023 on the How often did you get income for? screen.

Select No, it didn’t involve intent to earn money on the Did the work involve an intent to earn money? screen.

Answering differently to any of these questions will imply self-employment and generate Schedule C.