This type of payment is taxed the same as other ordinary income at a rate based on your income level.
When you enter Form 1099-MISC in TurboTax, take care not to enter it in such a way that it appears to be self-employment income. If you did, you may have seen self-employment tax on your return.
If you enter the information in the 1099-MISC section, when you get to the screen that asks "Does one of these uncommon situations apply?" you can check the box "This was a tribal member gaming payment" even if the payment isn't related to gaming, if that is the closest situation that applies.
To report a Tribal Distribution that is not income from working, and would normally appear on a Form 1099-MISC except that the dollar amount is low, you can enter it as Other Reportable Income.
In TurboTax online:
- Go to Wages and Income
- Scroll down to Less Common Income
- Go to Miscellaneous Income
- Select Other Reportable Income and follow the prompts. You can enter "tribal distribution" as the description.
See here for more information from the IRS.
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