My 1099 misc income of $2,133 is for reimbursement of health ins. premiums through a govt program, how do I report it--the system is trying to fill out a Schedule C?

[Opus 17]

What kind of program is that?

[jerbneu1963]

It's a premium reimbursement program...it's cheaper for the government to reimburse a portion of the premium than to have children on medicaid.

[Opus 17]

So Medicaid is a state program.  Which state, and which box of the 1099 is the income in?

[Opus 17]

And what do you have to do to get the reimbursement?  Qualifications, duties, etc.

[jerbneu1963]

Sorry, I'm not explaining myself very well--DSHS in WA pays a portion of my private health insurance premium in lieu of having my kids on Medicaid.  Box 3 is where the income is reported.  I send my paystub once a month to the program and they cut a check and direct deposit to my checking.

[rjs · Accepted solution]

If the income is in 1099-MISC box 3 and TurboTax is filling out a Schedule C, you must have entered it incorrectly or answered a question wrong.

Here's how to enter a 1099-MISC with income in box 3 in TurboTax so that it is reported on Form 1040 line 21.

• Click the Federal Taxes tab.
• Click Wages & Income.
• Click "I'll choose what I work on" or "Jump to a full list."
• On the screen "Your 2016 Income Summary," scroll down to the section "1099-MISC and Other Common Income." Click the Start button for "Income from Form 1099-MISC."
• The next screen asks "Did you get a 1099-MISC?" Click Yes.
• On the next screen enter the information from the 1099-MISC form, then click Continue.

TurboTax will now ask a series of questions about the 1099-MISC income. Answer as follows, even if some of the answers aren't true.

• "Describe the reason for this 1099-MISC." - It doesn't matter what you enter. Enter a short description such as "Reimbursement." Click Continue. You will see this description used in some of the subsequent questions.
  
• "Does one of these uncommon situations apply?" - Select the last choice, "None of these apply," and click Continue.
• "Did the Reimbursement involve work that's like your main job?" - Select No and click Continue.
• "How often did you get income for Reimbursement?" - "I got it in 2016" will already be checked. Don't check any of the other boxes. Just click Continue.
• "Did the Reimbursement involve an intent to earn money?" - Select No and click Continue.

This will report the income as Other income on Form 1040 line 21 with the description "Other Income from box 3 of 1099-Misc." It will not fill out a Schedule C.

[winonajenkins196]

In response to this, should we then enter that it is also excludable for Medicaid payments since it is a health insurance premium reimbursement?

[fdarilek7]

Your answer looks like it’s referring to 2016 returns only. Does this answer work for 2019 returns?  I tried following the steps because I too get my medical premiums reimbursed but my total was only $749.  When I select that I have a 1099 MISC it gives me no choice but to upgrade to the Deluxe version before I can enter any information . I don’t want to be forced to pay $30 unless I absolutely have to. 

[Hal_Al]

@fdarilek7 - Yes, a  1099-Misc, even for misc income, requires an upgrade. 

TurboTax also has another free product called the Free File Edition (not to be confused with the regular Free Edition).  It has free Federal preparation and free State preparation. There is no efiling fee. It is not available after October 15

The Free file Edition can handle a 1099-MISC.

The Free file Edition is more fully-featured than the regular Free Edition.  The Free File Edition can prepare Schedule A, C, D, E, and F that the Free Edition cannot. 

For Free File Edition a user needs to meet only ONE of these qualifications:

•      AGI of $34,000 or less
•      or active duty military (including Reservists and National Guard) with a military-issued W-2 and a 2018 AGI of $66,000 or less
•      or eligible for the Earned Income Credit (EIC aka EITC).

The FREE FILE Edition is located at:
https://turbotax.intuit.com/taxfreedom

How to switch and start over in Free file Edition
https://ttlc.intuit.com/questions/2026912-how-do-i-switch-to-turbotax-freedom-edition

[fdarilek7]

Thank you!  I do qualify for that version so I will go check it out now!  

[fdarilek7]

@Hal_Al 

I’m not sure what I’m doing wrong but even after I follow the direction you gave the software is still assuming my medical premium reimbursement is from self employment and asking me lots of questions that don’t pertain to my situation. Am I doing something wrong?

[Hal_Al]

I assumed the amount was in box 3 of the 1099-Misc.  If it is in box 7, it may be self employment.  Who paid you this money and why? If it's your employer, then it amounts to taxable compensation and that is subject to FICA (social security and medicare tax).  It sounds like your employer wants you to pay both the employee and employer share of FICA.

That said, even when the amount is in box 7, folloing those interview answers will put it on line 8 of Schedule 1, not schedule C (self employment). I just tested it.

[fdarilek7]

@Hal_Al 

I get my primary insurance premiums that my emoloyer provides me reimbursed through Washington State Healthcare Authority. My premium is deducted from my paycheck and then I send my paystubs to Washington State Healthcare Authority and they reimburse my premium. My 1099 Misc shows the income in box 3. 

[Hal_Al]

That's not self employment and should go on  line 8 of Schedule 1. 

After entering the 1099-Misc

TurboTax will now ask a series of questions about the 1099-MISC income. Answer as follows, even if some of the answers aren't true (lying to TT to get it to do what you want does not constitute lying to the IRS)

• "Describe the reason for this 1099-MISC." - Enter a short description such as "medical Insurance Reimbursement." Click Continue. 
• "Does one of these uncommon situations apply?" - Select the last choice, "None of these apply," and click Continue.
• "Did the Reimbursement involve work that's like your main job?" - Select No and click Continue.
• "How often did you get income for Reimbursement?" - "I got it in 2019" will already be checked. Don't check any of the other boxes. Just click Continue.
• "Did the Reimbursement involve an intent to earn money?" - Select No and click Continue.

I tested it and it works.