Compensation for medical research

Forum|Forum|4 years ago
April 2, 2022
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I participated in a research study for a new medication. I was paid for my participation, and received a 1099-NEC. Turbotax asks if any uncommon situations apply. One possible answer is This money is not earned as an employee or self employed individual, it is from a sporadic activity or hobby (this is not common.) Does that apply here or am I better off with None of the above? Thanks!

Best answer by KrisD15

Form 1099-NEC is meant to report Self-Employment income.

Since this was not earned as an employee, you would want to answer "Yes" to that question and have it reported as Other Income rather than Self-Employment income.

KrisD15Answer

Form 1099-NEC is meant to report Self-Employment income.

Since this was not earned as an employee, you would want to answer "Yes" to that question and have it reported as Other Income rather than Self-Employment income.

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Richard121

I made incorrect entries and TurboTax shows I have a business (I don't have a business) cannot seem to get this changed within TurboTax

PatriciaV

Employee

Assuming you received and entered Form 1099-NEC:

To enter a Form 1099-NEC that is not for self-employment:

Open your return and go to Federal >> Wages & Income >> Other Common Income >> Income from Form 1099-NEC. Click Start/Update.

Or enter 1099-nec in the Search box located in the upper right of the program screen. Click on Jump to 1099-nec.

You may wish to delete (trashcan icon) the entry you already made, or edit as follows:

On the screen Did you get a 1099-NEC?, click on Yes
On the screen Do You Want to Enter Your 1099-NECs Now?, click on Add a 1099-NEC
On the screen Let's get the info from your 1099-NEC, enter your information and click Continue
On the screen Describe the reason for this 1099-NEC, enter a reason and click Continue
On the screen Does one of these uncommon situations apply? Select This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby and click Continue.

These entries will report the income on Schedule 1 Line 8z Other Income. The total from Schedule 1 Line 10 flows to Form 1040 Line 8 as ordinary income. No self-employed/business income will be reported.

@Richard121

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