1099-Misc

[osk]

I received a 1099-Misc for a Housing Subsidy Grant. The grant was awarded from my college for housing during my summer internship. They paid the property owner directly. I never received any money. Is it considered taxable income?

[MinhT1]

A housing subsidy grant is taxable and has to be reported on your tax return.

If you receive a form 1099-MISC for a housing subsidy, then you are not considered as self-employed and do not need to file a Schedule C.

In TurboTax, enter your form 1099-MISC and follow the interview until you arrive at the page titled Did this involve an intent to earn money. Answer that this did not involve an intent to earn money. The amount will be reported as Miscellaneous income and will not be subject to Self-employment tax.

In TurboTax, there is a work-around. Although you may receive this income every year, say that you only receive the 1099-MISC only in 2019, not in previous years and not in 2020, you will then have the screen where you can say that it did not involve an intent to earn money.

[johnz57]

I gave a research presentation and received an honorarium and form 1099-MISC. I entered the form in TurboTax, but it keeps giving me error messages and Let me fill out Schedule C, which i dont need. Please provide a step wise instruction to fix it. I have tried many ways and it didnt work. it is very annoying.

Thanks in advance.

[ThomasM125]

The schedule C requirement is prompted by your answers to questions regarding the nature of the work that you provide that prompted the form 1099-MISC to be issued.

As a practical matter, you would need to indicate that the income was for work not related to your normal job, and that you did not perform the services in the previous year or intend to perform them in the future.

Otherwise, the IRS would consider the income to be self-employment income and in that case it should be reported as such on schedule C.

[CarmenAnd]

Hi

Would you follow this steps if you received a housing subsidy or grant from the city (DC)? My mother receives a senior shallow subsidy every month for rent. I am not sure how to report this income as they have it listed as rent (box 3) on her 1099 MISC. Turbo tax wants to treat it as if she is self-employed...running a business. 

[BillM223]

As noted above, if you enter the 1099-MISC income in box 3, then say that this did not involve work like her main job and then also answered that did not involve an intent to earn money, then TurboTax will not treat this income as for a business.

Go back and take a look at how you entered the 1099-MISC.

[CarmenAnd]

DC Housing noted this in box 1 labeled "rents".  I don't get the option to note that it did not involve work or an intent to earn money.  It is asking whether this is rental income, income from your business or rental property, farm rental equipment, and or nonbusiness income from rental of personal property or equipment....none of them apply??

[ThomasM125]

I would be considered rental income, since it involves a payment for use of rental property. So indicate that in the program, just don't enter any expenses associated with it.

[sonyab]

Hi Johnz57,

   I am in a similar boat. Were you able to figure out this issue? If so, would you mind letting me know the steps you took?

Thank you very much!

[Carl]

Either the TurboTax screens are not clear (and they are clear to me) or there's a serious comprehension issue here indicating that our education system is failing us.

If the income is reported to you in box 1, then you are a landlord who owns rental property, or a property manager paid to manage rental property owned by others. Period.

If the income is reported to you in box 2, then you are the owner of royalty rights and received payment for your royalty rights.  For both box 1 and box 2 the income is reported on SCH E.

If you do not own or manage rental property, or do not own royalty rights, then the 1099-MISC is wrong. You need to contact the issuer and have them issue you a corrected 1099-MISC with the amount reported on box 3.

It's also possible that the income reported in box 1 was reported to you by mistake, when it should have been reported to the owner/landlord of the property. Check with the issuer on that. Income in box 3 should be reported to you the student. Income in box 1 should be reported to the landlord/property owner.

Reporting 1099-MISC (box 3 or box 7) that is not self-employment income

Under the Wages & Income tab (or Personal Income tab) scroll down to Other Common Income and elect to start/update Income from form 1099-MISC. Then click YES to indicate you have a 1099-MISC.

Enter the 1099-MISC exactly as printed, and then Continue.

Enter the reason you got this money – be it scholarship, bonus, streaking butt naked across the 50 yard line of the super bowl, whatever. Then continue.

Select None of these apply, then Continue.

Select No, it didn’t involve work….. and Continue.

Select ONLY the tax year for which this specific 1099-MISC was issued. Do not select the year that you received the 1099. Select the year for which the 1099-MISC was issued. Select no other year. Then Continue.

Select No, it didn’t involve an intent to earn money, then Continue.

Select NO, then Continue.

Click the DONE button, and that does it.

[sonyab]

@Carl After doing the latter (i.e. 1099-MISC box 7 that is not self-employment income) approach as you have described, TT is still requesting that I fill out additional forms that suggest I am self-employed.

My 1099-MISC, however, was generated from a one-time event for which I received an honorarium. According to other well-thought-out replies on this site, this activity does not constitute self-employment. Hence, why I am asking here. Again, the question is, are there other approaches other than that which you described which will not generate a Schedule C in TT?

Thanks!

[Carl]

TT is still requesting that I fill out additional forms that suggest I am self-employed.

That's because you've now entered the 1099-MISC 2 or more times. Therefore as far as the program is concerned, you havea received more than 1 1099-MISC.

Under the Personal Income tab scroll down to Other Common Income.

Under that elect to start/update Income From Form 1099-MISC.

One at a time, click the DELETE button next to each 1099-MISC entry listed and delete it. Once all entries are deleted, continue working through until you get to a screen with a DONE button on it. Your change *DO* *NOT* *STICK* until *AFTER* you click a DONE button.

You're not done yet.

If using Home & Business or Self-employed version of Turbotax, select the BUSINESS tab.

If using any other version of TurboTax, click the Personal Income tab and scroll down to the BUSINESS ITEMS section.

Elect to start/update Business Income & Expenses (SCH C).

If there is *ANYTHING* there with a delete button next to it, click that delete button to delete the SCH C. Once done continue working through that section until you get to a screen with a DONE button on it. Your changes *DO* *NOT* *STICK* until *AFTER* you click the DONE button.

Now save your tax file and totally and completely exit the TurboTax program in it's entirety. Then restart the program and use my guidance above for entering the 1099-MISC correctly.