1099 MISC

[Bill3915]

I used to work as a temp for an agency. I left there four years ago. Last year they sent me a check for $2,400 saying that they had made a mistake on the amount of premiums they were supposed to submit on my behalf to the city agency that regulates them. But rather than settle with the city, they sent me a check for the amount. It was reported to me on a 1099MISC in Box 7, Nonemployee compensation. This is creating fits for me because Turbo Tax thinks I was operating a Sole Proprietor business. None of the questions it asks are relevant because there was no business but it won't let me continue my return. Any suggestions?

[KrisD15]

What do you mean by "amount of premiums they were supposed to submit on my behalf".

If this was for Health Insurance premiums you paid, was it paid with pre-tax or after-tax dollars? 

Did you claim the payments on Schedule A that year as medical expenses? 

Were these payments made, not with your earnings, but by the temp service (so you did not pay any withholding on this amount)?

If this was included in your wages originally:

If they were pre-tax, enter as "other income" (below self-employment under Wages & Income) and pay the income tax due. 

If they were taxed as earnings before and included in your wages, the amount is not taxable as long as you did not claim a deduction for them on that year's tax return. 

If this was never included in your income:

If this was paid by the temp service and was never earned by you previously, and the temp service did not withhold FICA taxes, you would need to pay those now. In this case you can use Deluxe since there would be no expenses to claim, but you would need to pay self-employment tax.

In other words, does this 1099-MISC represent earnings from 4 years ago, or new income for 2019?

If from 4 years ago, was income tax and FICA withheld at that time? Whatever wasn't withheld then must be paid now.

If new income for 2019, did they withhold income and FICA? If not, you'll have to.