Question

I received an Iowa DHS Retention Bonus (https://dhsbonusprogram.powerappsportals.com/) reported on a 1099-NEC. I am a preschool teacher. Why schedule C?

Forum|Forum|3 years ago
February 2, 2023
2 replies
0 views

This income was not based on hours or services rendered. It was not paid by my employer. Do I need to report it as business income on a Schedule C?

TurboTax Online

AmyC

No, you do not want sch C and self-employment tax. You want to enter the 1099-NEC:

under Other Common Income.

Select Add 1099-NEC and enter the information. If you upload, double check the entries.

Describe the reason, Retention Bonus, continue

Select This is not money earned as as employee. It is from a sporadic activity.

It was not a regular payment, it was a one time event.
This was a bonus to keep you as an employee - not part of your regular earnings.

This properly puts the money on line 8z of schedule 1.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

A

Ashel56Author

I was told by an expert last year when I had a similar situation that putting this income as “other income” would automatically trigger an inquiry because anytime a 1099-NEC was submitted they would look for a Schedule C. Can anyone confirm or deny the legitimacy of this claim? I do not want to deal with the headache of an inquiry.
@AmyC

PatriciaV

While there are no guarantees for what the IRS may or may not do, the answer provided by Expert AmyC is correct. Form 1099-NEC is relatively new and used to report many types of income. Receiving this form does not always mean you are self-employed. That's why you'll see several options under Other Common Income in TurboTax. As you enter the 1099-NEC, just be sure your answers are accurate and complete.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"

M

mseifer1

Similar situation to above - Received a retention bonus as a preschool teacher from a state govt agency. Received a 1099-MISC. Turbo tax continues to force this into a schedule c. How do I just account for this as misc income and not a small business. Turbo tax 2022 kept it as misc income on schedule 1 - And did not force a business based filing.

CatinaT1

If you received a 1099-MISC, you would enter it this way.

Take the following steps: 

Sign in to TurboTax Online, click Continue your return, then pick up where I left off (if you are using TurboTax CD/ Download, then just open your return on your computer);
Click on Federal Taxes at the top of the screen;
Scroll down the page to the last section titled:  Other Common Income;
Select start or update next to the topic titled Income from Form 1099-Misc;
Answer Yes, to the questions Did you get a 1099-Misc?;
Enter the information from your 1099-Misc;
Enter Retention Bonus for a reason for the 1099-Misc;
For uncommon situations, select None of these apply;
You will then be asked if the bonus involved work that's like your main job, say No.