Hello! I live and operated a business in WA state, as a webhosting company, for a client in TX, and he sent me a "combined tax statement for forms 1098, 1099, 5498 1099 -nec copy B" and it only has rows of blue and white lines. Under the column for IRS BOX #, it has 2 rows, "1" and "7", Nonemployee compensation, and State Income, and both amounts are the same. No state is mentioned. I understand neither WA nor TX has a state income tax, and my tax prep platform website has a dropdown box for a state to choose for boxes 5-7. Should I leave the tax state dropdown box empty since there's no state abbreviation on the 1099-NEC composite form and since, if I'm right, there's no need to designate either state since it's a moot point for state tax returns in any case?
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Yes, leave the dropdown blank. And you are correct, there is no need for a state designation. Leave boxes 5, 6, and 7 blank.
Thank you! I admit I'm still a little confused, the page on the website where I enter my 1099-NEC asks me to enter it how it is on the form, and the composite 1099-NEC has a number in 'box 7' (even if the box is just a row named box 7), ...is it ok if I just put the numbers in boxes 1 and 7 as the form has them, and keep it how the 1099-NEC has it, while leaving the state dropdown choice empty?
No, just enter the Box 1 amount. If you put an amount in Box 7 (State Distribution), TurboTax will want a State associated with it.
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