Question

IRC Section 139 deduction for business

Forum|Forum|5 years ago
February 21, 2021
1 reply
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On what form does a business take the IRC section 139 covid 19 relief payment for employees?

Code section 139 allows a business to make non-taxable disbursements to employees affected by a disaster or in your case, by the Covid-19 pandemic.

You would simply enter the expenses as Other Expenses on your business income tax return and keep documentation supporting their qualification.

You can learn more about this here:

https://www.law.cornell.edu/uscode/text/26/139

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B

benjaminr

I received a qualified disaster relief payment from a not-for-profit (not an employer), which I gather is non-taxable. However, they issued a 1099-MISC, so I need to report it somewhere. How do I do this on Turbotax to ensure I am not taxed?

MaryM428

If the income is not taxable then you will report the income in TurboTax and then do an entry to back out of the income by entering it as a negative amount.

Enter the income in Federal, Wages and Income

Less Common Income

Miscellaneous Income

Other Reportable income
Your first entry will be the 1099-MISC fields

Then make another entry with the same information and label it "Cancel Out Tax on 1099-MISC"

In the second entry, put the same amount of money but put a minus sign in front of the number so it will be negative and cancel out the taxes on the 1099-MISC.

Qualified disaster relief payments include payments made to an individual for “reasonable and necessary personal, family, living or funeral expenses as a result of a qualified disaster.” It also includes payments made on behalf of the individual.