Question

For earned income from a 1099-NEC, how do I select earned, not unearned? It shows up on form 1040-SR, Line 12 as earned income over $750 but is checked no instead of yes.

Forum|Forum|5 years ago
February 2, 2021
2 replies
0 views

There is no place on the online TurboTax Delux to state whether the 1099-NEC income was earned or unearned. It seems that the automatic entry is unearned which causes an error when this income is put into the roth-ira since that income must be earned. I need to classify my 1099-NEC income as earned to prevent this since my work was independent contractor work.

TurboTax Deluxe Online

S

sls50211

It sounds like there is an input issue with the 1099-NEC. I would recommend deleting it and starting over. Go to the search at the top of the screen the enter "Form 1099-NEC" in the search box. You will see a "Jump to" function that will take you to the 1099-NEC screens. Delete the form you have there by clicking on the trash can then re-enter by clicking the "Add Another" link.

It sounds like the amount is getting picked up as miscellaneous income. If you have an old 1099-Misc form in your income section, you need to delete it and add the 1099-NEC. The 1099-Misc is not used for non-employee compensation in 2020.

F

Frank McCormick

I tried the proposed solution of deleting the information that was imported and typing in new information on my honorarium for consulting, but TT still insists I have zero earned income and so cannot contribute to a Roth.

KathrynG3

It does not appear to be properly recognizing Form 1099-NEC as earned income.

If you already changed the input to be directly in the Self-employment income & expenses section, try reporting the income as received in the COMMON INCOME section, but in the alternative section, Other self-employed income, includes 1099-K, cash, and checks.

VolvoGirl

Employee

Line 12 where? 1040/1040SR line 12 is for the Standard Deduction or Itemized Deductions. Where is the checkbox for no/yes? I don't recall ever seeing that anywhere. Do you have the Desktop program and looking at worksheets? Do you have a Schedule C for it showing the Net Profit?

If you have Schedule C be sure it and the IRA contribution are listed for the same person if you are married.

C

cross-marcellaAuthor

Thank you for your reply. I am using the online deluxe version of TurboTax. To find the location Line 12 on the 1040-SR I downloaded/printed the draft form using the tools tab to view where my income was being classified as unearned rather than earned. I am unable to get the online TurboTax into forms mode where I could change that checkbox to yes. I am filing single and as a person claimed as dependent on someone else's tax return. The only form I have received from my employer is the 1099-NEC and not a Schedule C. Does this help clarify my question?

Thanks!

O

Opus 17

Employee

I think, that if you enter the 1099-NEC and check the box for "I have expenses for this income", that will create the schedule C. Online Deluxe can't prepare a schedule C with expenses so you will need to upgrade to the self-employment program.

You can also get this to be earned income on a schudule C if you upgrade to the self-employed version and create your business first, then enter the 1099-NEC as your business income.

This seems to be a design problem. We've notified the moderators of our suggestions and I think it is being looked at by the program quality team, but I don't know when it might change.