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Davesmyers
Level 1

Reimbursement of Donut hole coverage for Part D

I received a payment for Donut hole coverage for Part D Prescription Drug Coverage from a former employer as a retiree benefit. The former employer provided 1099 Misc for the amount. Turbotax will not just let me enter this as income without directing me to schedule C as if I was still an employee even though I checked the option that this payment didn't involve any work. 

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Accepted Solutions
MinhT1
Expert Alumni

Reimbursement of Donut hole coverage for Part D

If you receive a form 1099-MISC for an employee benefit, 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.

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2 Replies
MinhT1
Expert Alumni

Reimbursement of Donut hole coverage for Part D

If you receive a form 1099-MISC for an employee benefit, 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.

**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"

View solution in original post

Davesmyers
Level 1

Reimbursement of Donut hole coverage for Part D

This solved the problem! Thanks very much!

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