Nonemployee Compensation

[Sadiehoffman7]

I work at a Bank which has a partner company. I do work for the partner company but receive compensation through my employer only. I got a Christmas Bonus from the partner company for helping out and so I received a 1099-NEC with the amount in Box 1. I wouldn't file this as self-employment right? And I'm not technically an employee there. So should it have been reported on a W-2? I'm not sure what type of income to label it as out of the listed options. Thank you!

[KrisD15]

If it was reported on 1099-NEC, it MUST be reported as Self-Employment income.

The IRS brought back Form 1099-NEC to avoid confusion, it cannot be reported any other way. 

Part of the reason is that the Payer, in your case the Parent Company, does not withhold FICA tax (your Social Security and Medicare Tax) and the only other way that can be collected is through Self-Employment tax. 

Self-Employment tax is both halves of the tax (Employer and Employee portion) however you also get a credit for the Employer's half that you pay.

It does seem like a burden for you to report the bonus this way, but unless they included it on your W-2, it's your only option. 

[Sadiehoffman7]

Thank you for the quick response! Turbo Tax is saying I'll have to fill out a SS-88? Is that accurate?

[DianeW777]

It's not unusual.  The SS-8 is a form the IRS uses to determine whether you are an employee or self employed.  It is completed and mailed separately from your tax return You should fill it out and send it in for an actual determination.

Three things will happen when you complete the Form 8919:

1. You will be charged only the employee share of social security and medicare taxes.
2. The IRS will go after the company for the other half employer share of the taxes
3. The IRS will make a determination considering both the 8919 and the SS-8.

@Sadiehoffman7