Skip to main content
February 27, 2021
Question

I received a 1099-Misc from my employer as an Education Award that was paid directly to my student loan. Why do the self employment tax questions come up. Gets confusing

  • February 27, 2021
  • 2 replies
  • 0 views
All of the these pop questions keep appearing and they don't seem relevant. It's not a side business or anything like that. It's more like a bonus for my work that just goes directly to my student loan.

2 replies

Hal_Al
Employee
February 27, 2021

What does "Education Award" mean and why did you employer pay you? What box # on the 1099-Misc was the $ in.  Was it a 1099-MISC or 1099-NEC? 

 

Money from your employer is usually compensation and subject to social security and medicare (FICA) tax as well as income tax.  If your employer didn't pay FICA, then you have to pay it in the form of self employment tax.

 

Qualified Tuition reimbursement, if handled properly (not reported on a 1099 of any kind) can be tax free (up to $5250).

Scholarship are tax free, if used for qualified educational expenses (tuition, fees and books) but employers don't usually issue true  "scholarships"

Carl11_2
Employee
February 27, 2021

A 1099-MISC with income reported in box 3 is assumed to be self-employment income. However, that's not the only thing box 3 can be used for. You just have to enter it in the right place in the program. There are 3 places where a 1099-MISC can be entered. So as not to generate the SCH C (which you may need to manually delete yourself in the Business Income (SCH C) section of the program) enter the 1099-MISC under the Personal Income tab in the Other Common Income section. Under that section elect to start/update Income from Form 1099-MISC.

Work it through. ON the page, "Does one of these uncommon situations apply?" select None of these apply, and continue.

Select NO, it didn't involve work ..... and continue.

Select that you got it in 2020, and *ONLY* in 2020. Then continue.

Select NO, it didn't involve an intent to earn money, and continue.

Select NO to indicate you do not have another 1099-MISC and continue. That does it.