Form 1099-MISC is used to report a variety of miscellaneous payments to an individual. The form name was changed from Miscellaneous Income to Miscellaneous Information in 2021.
To enter Form 1099-MISC in TaxSlayer ProWeb, from the Federal Section of the tax return select:
- Income
- 1099-MISC - For a MFJ return, indicate if it's for the taxpayer or the spouse.
After the first 1099-MISC has been entered, click + Add another Form 1099-MISC to add another one.
| Payment | Box | Schedule to report | Description | |
|---|---|---|---|---|
| Current | Prior to 2020 | |||
| Rents | 1 | 1 | C, E, 4835 | All types of rents. Usually linked to Schedule E, but see below for exceptions to reporting rents on Schedule E. If including on Schedule C or Form 4835, don't enter the 1099-MISC here but enter the amount of rents directly on the schedule or form in Gross Receipts. |
| Royalties | 2 | 2 | C, E | Royalties from oil, gas, or mineral properties, copyrights, and patents. Oil or gas payments for a working interest aren't entered here but should be entered directly on Schedule C. |
| Other income | 3 | 3 | 1, C, F | Miscellaneous Income that doesn't fit any other box, including prizes and awards, payments received as the beneficiary of a deceased employee, taxable damages, Medicaid Waiver (difficulty-of-care) payments, and Indian gaming profits. If it is trade or business income, don't enter the 1099-MISC here but enter it directly on Schedule C or F. |
| Federal income tax withheld | 4 | 4 | ||
| Fishing boat proceeds | 5 | 5 | C | |
| Medical and health care payments | 6 | 6 | C | |
| Nonemployee compensation | - | 7 | C, F | Before 2020 this is self-employment income. Starting in 2020, this income is reported on Form 1099-NEC. |
| Payer made direct sales of $5,000 or more of consumer products to a buyer | 7 | 9 | Check box for informational purposes only, but if checked the return will generally include Schedule C for this activity. | |
| Substitute payments in lieu of dividends or interest | 8 | 8 | 1 | Amount of $10 or more received by the taxpayer's broker as a result of a loan of their securities. Don't enter in the 1099-MISC menu, but enter the amount as Other Income on Schedule 1. |
| Crop insurance proceeds | 9 | 10 | F | Flows to Schedule F. |
| Gross proceeds paid to an attorney | 10 | 14 | Don't enter in the 1099-MISC menu. Enter the taxable portion only in Gross Receipts on Schedule C. | |
| Fish purchased for resale (new for 2021) | 11 | Pending. | ||
| Section 409A deferrals | 12 | 15a | Informational only; doesn't flow to any form or schedule. | |
| Excess golden parachute payments | 13 | 13 | Excess golden parachute payments income won't appear anywhere in the return, but the payments are subject to an excise tax of 20% included on Schedule 2 Line 8 coded EPP. | |
| Section 409A income / Non-qualified deferred compensation | 14 | 15b | Income received under a Nonqualified Deferred Compensation (NQDC) Plan that doesn't meet the requirements of Section 409A. Tax on this income will be included on Schedule 2 Line 8 coded NQDC. | |
| State tax withheld | 15 | 16 | Flows to the tax return for the state indicated. | |
| State income | 17 | 18 | Flows to the tax return for the state indicated. | |
| FATCA filing requirement (check box) | If checked, the payer issued this 1099-MISC to satisfy its chapter 4 account reporting requirement. (You may wish to check the Form 8938 instructions to see if the taxpayer has a similar reporting requirement.) | |||
Exceptions to reporting Box 1 rents on Schedule E
Rents in Box 1 are usually reported on Schedule E, but they should instead be reported on Schedule C or Form 4835 in these situations:
- If the taxpayer provided "significant services" to the renter, such as maid service, report the rental activity on Schedule C. (Significant services do not include utilities, trash collection, or cleaning of public areas.) Provision of significant services commonly denotes a hotel or motel.
- If the taxpayer is a real estate dealer, report the income and expenses from rentals of real estate held for sale on Schedule C.
- If the taxpayer's business is renting personal property, such as a vehicle or equipment, report the rental activity on Schedule C.
- If the taxpayer is renting farm land, report farm rental income and expenses on Form 4835 if all of the following are true:
- The taxpayer is an individual (rather than a company),
- They received rental income based on crops or livestock produced by the tenant, and
- They didn't materially participate in the management or operation of the farm.
Medicaid Waiver Payments (difficulty-of-care) reported in Box 3
If the amount in Box 3 is for Medicaid Waiver (difficulty-of-care) payments, ensure the following additional steps are followed in the tax return:
- If the payment is being reported as income on Schedule C, be sure to indicate the same amount as an "Other" expense notated Notice 2014-7.
- If the payment is being reported as Other Income on Schedule 1, be sure to indicate the same amount in the Medicaid Waiver Payment field in the 1099-MISC entry screen.
Important points regarding entering Form 1099-MISC:
- If the payment is in Box 1, Rents or Box 2, Royalties, after exiting the 1099-MISC entry screen you will be queried if you would like to create a new Schedule E or link to an existing Schedule E. Not linking the 1099-MISC to a Schedule E will result in the return not being e-fileable.
- If the payment is in Box 3, Other Income, the amount will flow to Schedule 1 Line 8 Other Income. To include the payment on Schedule C or F, don't enter it in this menu but enter it directly on the schedule.
- If the payment is in Box 5, Fishing boat proceeds or Box 6, Medical and health care payments (or Box 7, Nonemployee compensation prior to 2020), after exiting the 1099-MISC entry screen you will be queried if you would like to report it on a new or an existing Schedule C. You must select one or the other.
- If the payment is in Box 9, Crop Insurance Proceeds (Box 10 prior to 2020), after exiting the 1099-MISC entry screen you will be queried if you would like to create a new Schedule F or link to an existing Schedule F. Not linking the 1099-MISC to a Schedule F will result in the return not being e-fileable.
Taxpayer received a 1099-MISC but believes they are an employee
Non-employee compensation is reported on Form 1099-NEC, but prior to 2020 non-employee compensation was reported on Form 1099-MISC in Box 7. If the taxpayer received 1099-MISC for non-employee compensation instead of receiving Form W-2, it is because the payer did not consider them an employee (and thus did not withhold income tax or social security and Medicare tax).
If the taxpayer believes that they are an employee and cannot get the payer to correct this form, don't enter the Form 1099-MISC in the Income menu. Rather, complete Form 8919, Uncollected Social Security and Medicare Tax on Wages. This will result in the amount being included on Form 1040 Line 1 (Line 7 for tax years prior to 2018) or for nonresident filers on Form 1040-NR Line 1 (Line 8 for tax years prior to 2019).
Note: This is a guide on entering Form 1099-MISC into TaxSlayer ProWeb. This is not intended as tax advice.
Additional Information: