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MN234
Returning Member

Received a w-2 instead of a 1099-NEC

I'm self-employed and my clients send me 1099-NECs. But this year, one client sent me a W-2 form with "none" in boxes 2 and 4 because they didn't withhold any taxes. The amount in box 1 is correct (it's the amount they paid me), but I don't understand why they sent me a W-2 rather than a 1099-NEC. I'm not their employee; I did one project for this client last year and had many other clients as well. 

 

Is this an error? Or is it okay to use a W-2 for non-employee compensation? And if this is okay, how should I record this in TurboTax self-employed? 

4 Replies
DMarkM1
Expert Alumni

Received a w-2 instead of a 1099-NEC

This is not okay.  The client that sent the Form W2 needs to correct and send a 1099-NEC.  Showing you as an employee will be worse for them.  They will owe 1/2 the social security and medicare taxes on the "wages" they reported paying you along with some penalties I'm sure.  

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MN234
Returning Member

Received a w-2 instead of a 1099-NEC

I looked back at my documentation from this client, and it looks like I was called a "contractual employee" -- the organization gave me a "visiting scholar" appointment to edit a book for them. The appointment letter specifies my lump-sum payment for that project, says they won't reimburse me for taxes, and says that "As a contractual employee . . . you will be provided an IRS form W-2 statement at the end of the calendar year." So it looks like the W-2 might be okay in this case, but I'm not sure how to enter it in TurboTax Self-Employed, especially since no taxes were withheld. 

DMarkM1
Expert Alumni

Received a w-2 instead of a 1099-NEC

You should enter the Form W2 in the "Job (W2) topic exactly as it is on your form.  Having said that, in the IRS world your pay is either as an employee or an independent contractor.  If the company issued you a Form W2, they classified you as an employee.  You can be an employee and not have income taxes withheld meaning that you will pay them at year end or quarterly if you wish. 

 

However, you did not mention any amounts in the boxes 3 - 6.  The social security and medicare taxes are paid by the employer.  Normally, the employer pays 1/2 and withholds the other half from the employee.  However they don't have to withhold your half they can pay them all.  Either way the employer is responsible. 

 

 

[edited grammar 2/4/2021 4:14pm]

 

 

 

 

   

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MN234
Returning Member

Received a w-2 instead of a 1099-NEC

Thank you -- I'll try entering the W-2 in TurboTax Self-Employed, though I don't really understand why this organization classified me as a "contractual employee." 

 

Boxes 3, 5, and 6 are blank (nothing in them at all), and in box 2 (federal income tax withheld) and box 4 (social security tax withheld) it says the word "NONE." 

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