One of my 1099-MISC is sending me back from the end saying I need to specify Sched C or F. There is no place for that. It's box 7 nonemp comp. A spiff from a vendor

[KrisD]

What is it for?

[Some-Guy-in-Texas]

I sold products and was paid a spiff for each one from the vendor I got the products from. I earned commission from my company on them, but the vendor also paid a small spiff for each one sold. I put that it was "commission from a payer that was not my employer" but at the review it says I need to "double click to pick which form to put it on" which doesn't work. The 1099-MISC I get from another company that is a manufacturer incentive doesn't give me this problem.

[Hal_Al · Accepted solution]

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

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 (Schedule1).

You use neither Schedule C of sch F.

[keithbarlow1]

Cool, thanks. My boss said not to use that but he also has a cpa and just signs his forms.

[keithbarlow1]

Hey, Hal. Followup, since your link nailed what I do. I was in the finance department and the spiff is for selling extended warranties. The company who provides the warranty, our contact there is a CPA and he says it is definitely Sched C income. I read Pub 525 and to me it seems to be a kickback. "You must include kickbacks, side commissions, push money, or similar payments you receive in your income on Schedule 1 (Form 1040), line 21, or on Schedule C (Form 1040) or Schedule C-EZ (Form 1040) if from
your self-employment activity." Since I'm not out hustling warranties on the curb, it's part of my job, I don't see how that would be self-employment, so I feel like you're right about it being line 21. So I delete the section when it pops up that self employment needs review, yes?

[Hal_Al]

What makes it (possibly) self employment is that the money is not coming from your employer.  It also appears that the product (warranty) that you're selling is not your primary product and from a different vendor than you primary product. As such, it may not qualify as a SPIFF. It's a gray area. If you have CPAs familiar with the arrangement telling you to report it on Schedule C, they're probably right.
The IRS is aggressive in looking into 1099-Misc i(box 7) income that is not reported on Schedule C. Most SPIFFs go in box 3 of the 1099-Misc.