1099-Misc for Dependent Child

[Aabest25]

I have a 10 year old who received a 1099-MISC from a fundraising company because he received $820 in Amazon Gift Cards as a reward for selling Cub Scout popcorn.  Do I need to file this under him or either myself or my wife? Do I need fo file this at all?

[TomK100]

You do not enter the child's income on your or your wife's return.   You can still claim him as a dependent.  He has to file his own return for the 1099-MISC.

On the Child's return be sure to check the box that says he can be claimed on someone else's return.  That is VERY important.  Double check that.

Was the amount in Box 3 or Box 7?  Box 3 is considered "Other Income/"  Box 7 is "Self-employed income."

[Aabest25]

The Amount was listed in Box 3 Other Income

[DawnC]

If it is in Box 3, it is Other Income.  As long as he has less than $1,100 in Other Income, he does not need to file it.  Save it for your records.  

[Critter]

Enter the 1099-Misc exactly as received. Do not change it. Turbotax (TT) will do that for your.  After identifying the reason for the 1099-Misc as "prize", you will reach a screen called. "Fair market value of prizes and awards".  There you will enter an adjustment for the prize value.  In your case enter -17,100.  TT will enter the 1099-Misc amount and the adjustment on line 21 of form 1040 (Schedule 1).

[Aabest25]

So I did a quick Federal and PA State return and it says my son will owe PA $25.  Does that sound right?

[kh123456]

so I'm in a similar situation, and the amount in box 3 is more than $1,100. Are you saying I should start a new return in Turbotax for my son, or can I enter this info on my return in Turbotax?

[Critter]

The child MUST file their own return ... you cannot put this on the parent's return.

[NinjaBobM]

I'm in the same situation. I entered the 1099-misc in a return for my son, but never saw a screen for "fair market value" for prize. TT also created a sole proprietor Schedule C form. Is that right or did I enter something wrong?

[LenaH]

It should be reported as Other Income on your son's return, not self-employment income. You must answer the questions that follow the entry screen for the 1099-MISC. On the screens that follow, you will also be able to get to the fair market value screen needed. 

1. Open or continue your return, if you're not already in it.
2. Search for 1099-misc and select the Jump-to link.
3. Edit your 1099-MISC.
4. Continue past the amounts already entered.
5. Describe the reason for this 1099-MISC as prize money.
6. Answer this was prize winnings on the screen Does one of these uncommon situations apply?
7. Answer the on-screen questions, which you take you back to the summary screen again. Hit done.
8. The next screen titled Fair Market Value of Prizes and Awards will enable you to enter the difference between the fair market value of the prize and the amounts listed on the 1099-MISC. 

@NinjaBobM

[HGLBuddy]

Hi, I have a very similar situation. My ten year old son Earned (emphasis on earned) $820 selling popcorn for Cub Scouts in 2019. He received a 1099-MISC with $820 in Block 3, Other Income. The compensation came in the form of Amazon Gift Cards, but the compensation was based directly on a percentage of sales. In other words, a commission on sales. As such, I considered this to be Earned Income, not prize money. He contributed $800 to a ROTH IRA based on the Earned Income. After reading this thread, I'm concerned that the IRS may not recognize it as Earned Income and disallow the ROTH IRA contribution in the future. Thoughts? Thank you!

[DMarkM1]

You are correct to be concerned.  You son doesn't appear to be in the business of selling popcorn.  This looks like a fundraising event and he received an award/prize for raising X amount of donations. This is not earned income and therefore a Roth contribution is not appropriate.  A 6% excise tax for excess contributions will apply for each year the contribution remains in the account.  You should withdraw the money prior to 17 May and find another suitable savings device.  

[Aasleson]

If the amount is $1,250 in box 3 for the same thing my kids received an Amazon gift card in this amount for their fundraising popcorn sales for boyscouts how do I enter that into the free version of turbo tax?! It says I have to pay to upgrade to enter is that right even though it’s for my kids fundraiser not for my income?

[DMarkM1]

Yes,  TurboTax Free edition does not handle income that results in a Schedule 1generation.  The 1099-Misc for fundraising is "Other Income" and goes to line 8 on the schedule 1.  

You will enter in the form 1099-Misc in the  "Other Common Income" topic.

1. "Show More"
2. "Start"  "1099-Misc"
3. Enter the form information
4. Describe as "Fundraising Award"
5. Select "Prize Winning"
6. Continue the interview

NOTE:  Remember this should be a return for your child and not income on your return.  

[Aasleson]

Thank you so much 

so even though my kids are 10 and 9 years old. I should file these separately under each of them individually?! It can’t be done under mine?