1099 misc and not self employed

[Frustrated20251]

I am trying to enter my 1099-Misc that I received for a retention bonus as other income but am stuck in the loop of it being classified as self employed. I don’t get an option of saying it’s not for the intent of making money as suggested in another post. 

[PatriciaV]

Retention bonuses are considered to be wages and must be reported on Form W-2, with appropriate tax withholding. Since this income was reported on Form 1099, you will need to pay Social Security and Medicare deductions as well as federal/state taxes on this income.

Although you received Form 1099-MISC, you should enter this as if it was Form 1099-NEC. Follow these steps:

Open your return and go to Wages & Income >> 1099-MISC and Other Common Income >> Income from Form 1099-NEC.

1. Add the employer and income information from the 1099.
2. Enter "Wages reported on Form 1099-MISC" as the reason.
3. Under "Does one of these uncommon situations apply?" check the box for "Taxpayer's employer reported this extra money on a 1099-NEC but it should have been reported on a W-2."
4. On the page "Filing Form 8919," check the box for "Taxpayer received a Form W-2 and a Form 1099-NEC, but all the income on this Form 1099-NEC should have been included on Form W-2."
5. In most cases, you have NOT filed Form 8919. Follow the prompts and TurboTax will prepare this form for you.
6. Note that you will owe Social Security and Medicare on these wages since your employer did not withhold them for you.

Now go back to the topic for Income from Form 1099-MISC and delete the entry you made previously that generated Schedule C. You'll also need to visit the Self-Employment Business list and delete the related Schedule C business.

The easiest way to find any section of TurboTax Online is to go to Tax Tools in the left column >> Tools >> Topic Search. Type in your topic, click the topic in the list and then GO to go directly to the start of that section. In TurboTax Desktop, use the Search box or Topic List found in the header.

[Frustrated20251]

I am a teacher so the retention bonus wasn’t from my employer but from a teachers association so it would not be reported on my W-2. Would it still be a 1099-NEC and the same steps?

[MindyB]

No, it would not.  

Here is how to report the 1099-MISC with the additional information (tip: try deleting what you have entered and starting over to be sure you get the questions about not involving intent to earn money):

• Navigate to Federal > Wages & Income > Other Common Income> Form 1099-MISC> Start or Revisit
• Enter the 1099-MISC as printed, Continue
• Describe the reason for this 1099-MISC: "Teacher Association Bonus" or similar.
• Select None of these uncommon situations apply, then continue
• Select No, it didn’t involve work that's like your main job and continue
• The next screen asks how often you get income from this source.  Select only the year of this specific 1099-MISC, 2024.
• Next, select No, it didn't involve the intent to earn money
• Verify that the amount is now populated on Schedule 1, Line 8z "Other Income."