Received 1099NEC for referral bonus

[Anonymous]

Hi, I referred a friend to a job-searching platform and he found a job. The platform gave me a $1000 referral bonus but they sent me a 1099NEC. How should I report it?

[PattiF · Accepted solution]

This would be entered as Other Income that would not be taxed as self-employment. 

You can enter the 1099-NEC this way if it was not received for self-employment

1. Wages & Income
2. Other Common Income
3. Select Income from a 1099-NEC
4. Enter the payer's name
5. EIN Number
6. Amount you received
7. Describe the reason for this 1099-NEC = State what it was for (referral)
8. Does one of these uncommon situations apply?
9. Click This is not money earned as an employee or self-employed individual, 

[AnonBP]

I'm in a similar situation with receiving a 1099-NEC for a referral bonus. I was a customer to the business that gave me the referral bonus for referring a family member to the business.

When filing online with TurboTax, I'm asked about the type of income and only provided with the following options:
-Self employment income

-Farm income

-Hobby

-Lawsuit settlement

-Medicaid waiver payments...

-Income that should've been reported on a W-2

I don't believe any of these apply, and I don't get any options like what's listed in steps 8 and 9 on the comment that I'm replying to. So I'm not sure how to proceed.

[AmyC]

Delete the 1099-NEC you have entered. see How to Delete. Now, I recommend you close the program and clear cache and cookies.

Let's enter the 1099-NEC. Follow these steps:

1. Open your return to the federal income section.
2. Locate income from Form 1099-NEC
3. Start/ Edit/ Revisit/ Review
4. Select Yes to did you receive NEC
5. Select add a 1099 -NEC 
6. Enter payer, id, and compensation
7. Continue
8. Reason for NEC -referral bonus
9. Continue
10. Uncommon Situation - select not money as employee or self-employed. Sporadic activity
11. Continue
12. Done

@AnonBP 

[AnonBP]

Hello and thank you for the reply. I tried the steps you mentioned, but I don't  get any further options to select or fill out after I finish entering payer, id, and compensation. So I never get the option to select the reason for the NEC or "Uncommon Situation".

[AmyC]

Ok, let's go step by step. Start at the right place. I am doing this fresh and taking screenshots.

Did you get? Yes

Do yow want to enter? 

Select Add a 1099-NEC

Enter the information from your form

Continue

Describe the reason

Continue

Does one of these uncommon situations apply?

Select not earned, sporadic

Continue

See the NEC summary

Done

If your program is not working correctly, need to contact support.

[AnonBP]

Thank you for the screenshots @AmyC . I assume that's from the desktop/software version of TurboTax, which may explain the differences we're seeing. I'm using filing via web browser. However, one of your screenshots makes me think I should use the Hobby option for my situation. I will try it out that way and see if things look okay. Just in case anyone else lands on a similar issue, I will share screenshots in order of what I see while adding a 1099-NEC using the web version. I may also go ahead and reach out to support as this may need to be reported as something that needs changed on the website to more closely match the desktop version.

Step 1 - Adding 1099-NEC

Step 2 - Type of income selection

Step 3 - 1099-NEC details

Step 4 - Summary page

[AmyC]

Yes, hobby option is correct for you. I am on the desktop and will make notes as well for the next person and update my answer. Thanks so much. Great job!

[AnonBP]

Okay, thank you for confirming. I greatly appreciate your quick and helpful responses!