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Does a taxpayer pay self-employment tax on the income received from a state agency to care for her five year old with autism?

Forum|Forum|3 years ago
February 24, 2023
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Received a 1099-NEC

TurboTax Online

Best answer by HelenC12

No, a taxpayer does not owe self-employment tax on amounts reported on the 1099-NEC they received from the state agency if they are not engaged in a trade or business of providing day care services. See IRS Family Caregivers and Self-Employment Tax.

The taxpayer must report the full amount of the payment on line 8i of Schedule 1 (Form 1040), Additional Income and Adjustments to Income

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HelenC12Answer

No, a taxpayer does not owe self-employment tax on amounts reported on the 1099-NEC they received from the state agency if they are not engaged in a trade or business of providing day care services. See IRS Family Caregivers and Self-Employment Tax.

The taxpayer must report the full amount of the payment on line 8i of Schedule 1 (Form 1040), Additional Income and Adjustments to Income

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poppi5070Author

Thanks for the reply. So I click the box for "This is not money earned as an employee or self-employed individual, it from a sporadic activity or hobby (this is not common)" ?