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blazeevy
Returning Member

Received 1099-NEC related to undocumented FSA debit card use.

Received 1099-NEC related to FSA debit card used, back in 2019, but company says they didn't received documentation so now being reported as income. This is NOT a business, which is how Turbo Tax is processing, I didn't provide my former employer any services. Should my former employer have issued this as 1099-Misc in "Other Income"?  Additionally, I do have the copies of the qualified items from the used card.

3 Replies
MaryM428
Level 6

Received 1099-NEC related to undocumented FSA debit card use.

The 1099-NEC is a new form.  It is correct to issue for a former employee FSA debit card.

Here is how to enter the 1099-NEC so that it does not appear as a business:

 

Federal
Wages and Income
1099-MISC and Other Common Income
Income from Form 1099-NEC

You will be asked to explain what the 1099-NEC was issued for.

 

 

blazeevy
Returning Member

Received 1099-NEC related to undocumented FSA debit card use.

I have entered this as you suggested but Turbo Tax is still processing a Schedule C & is asking for all the for items on the form....All related to a business (i.e. Accounting Method, Business Code, Business Name...}. 

 

This amount needs to be zero because I do have the receipts.  I did submit the receipts and I still have copies of them....They company would not allow them now.

 

ThomasM125
Employee Tax Expert

Received 1099-NEC related to undocumented FSA debit card use.

If you have expense receipts showing that you spent the income reported, then you can enter those expenses as business expenses and they will cancel out the income so your net income will be zero. That should resolve your issue.

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