I received a 1099 MISC for student loan repayment that clearly falls under non-taxable income. (IRS-Pub970) Where do I report this on the 1040 to make sure its not taxed?

[DS30 · Accepted solution]

Since you received a 1099-MISC related to this student loan repayment, then you have to report this to the IRS. But since the amount is actually considered non-taxable, then you will just need to include a negative amount for same amount titles "non-taxable student loan repayment" Both amounts will be reported on line 21 of your 1040 but will cancel each other out.

Here is how to enter both the 1099-MISC and the negative amount for the basis information as other miscellaneous income

To enter the 1099-MISC as miscellaneous income in TurboTax Online or Desktop, please follow these steps:

1. Once you are in your tax return, click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages & Income” ("Personal Income" in TurboTax Home & Business)
3. Next click on add more income “I’ll choose what I work on” (jump to full list) or show all income amounts
4. Scroll down the screen until to come to the section “1099-MISC and Other Common Income”
5. Choose “Income from Form 1099-MISC” and select “start’
6. Enter your 1099-MISC information
7. Click through the screen for work description (do not associate this 1099-MISC with all work listed)
8. Does one of these uncommon situations apply? - None of these apply
9. Did the involve work that's like XXXX main job? - No
10. How often did (you) get income for ? Just leave as 2017 only (even if you received a similar payment in a prior year, select 2017 only)
11. Did the involve an intent to earn money? No

Now your income will be reported on line 21 on your 1040.

To enter the negative amount (but only up to the amount of income being reported on your 1099-MISC),

1. Click on the “Federal Taxes” tab ("Personal" tab in TurboTax Home & Business)
2. Next click on “Wages and Income”
3. Next click on "jump to full list" or “I’ll choose what I work on” - show all income items
4. Scroll down the screen until to come to the section “Less Common Income”
5. Choose "show more", then Miscellaneous Income
6. Choose "Other Reportable Income" and enter this information here under other taxable income 
7. You can title it "Non-taxable student loan repayment amount".

[ilikeapplesandpies]

I have a similar issue. Are the steps similar for filing for 2019? Thank you!

[gingging2x]

My situation was I received from my son’s school a 2019 1099 MIsc with amounts in box 3 $1,500 and box 17-18 $1,500, box 7 $0. This was a reimbursement (portion of the total fee) for my son’s learning disability (dyslexia) evaluation which cost us $3,500. 

I’ve followed the instructions above, entered it as positive amount $1500 under “income from Form 1099-Misc,” then entered as negative amount ($1,500) under “less common income-miscellaneous income”.

My question is, is there a way I could deduct the balance of $2000 that I spent out of pocket?  If yes, which part of the form I could enter this as a deduction?  Let me know.  Thank you.  

[tdwong01]

I followed the steps outlines above but am receiving the following error on TurboTax: 

"Form Not Reported.  Your Form 1099-MISC  ... shows $xx on line 3 but this income is not reported on another form or schedule."  Please help! 

[JamesG1]

In TurboTax Desktop Home and Business, I am able to enter the student loan repayment and the reversing entry as the steps indicate.  The two entries are both listed on line 8 of 1040 Schedule 1 resulting in $0 net taxable income on the 1040 tax return.

Just to clarify, I am unsure what line 3 the diagnostic is referring to.  Does it mean box 3 income on the IRS Form 1099-MISC?  Has the 1099-MISC been associated with another schedule?