Question

1099 MISC non taxable

Forum|Forum|1 year ago
March 9, 2025
1 reply
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i recently moved to a different company. i received 1099 MISC and when i looked at my paycheck it is showing as Nonpayroll Payment - Final Pay Non Taxable.

how do i handle this in turbotax desktop Mac?

S

SabrinaD2

Step 1: Confirm that the income is non-taxable and not related to employment/payroll before entering it into TurboTax, you can follow these steps:

Review the 1099-MISC form: Check the description and the payer's information. If it states "Nonpayroll Payment - Final Pay Non Taxable," it is likely non-taxable.
Consult your employer or payer: Verify with them that the payment is indeed non-taxable and understand the reason behind it.
Refer to IRS guidelines: Certain types of income are explicitly non-taxable according to IRS rules. Examples include certain employee reimbursements, gifts, and inheritances

Step 2: Once you have confirmed your income isn't related to employment/payroll or non-taxable - Enter 1099-MISC into TurboTax:

Open or continue your return.
Navigate to the 1099-MISC section:
- TurboTax Online/Mobile: Go to 1099-MISC.
- TurboTax Desktop: Search for 1099-misc and select the Jump to link.
Answer Yes to Did you get a 1099-MISC?
- If you already entered a 1099-MISC, on the 1099-MISC Summary screen select Add another 1099-MISC.
Enter the info from your form into the corresponding boxes.
- For non-payroll payments, such as other income, make sure to enter the amounts in the appropriate boxes (e.g., Box 3 for other income).
  - If you need to enter boxes 4–6 or 8–17, select My form has other info in boxes 1–18 to expand the form.
Indicate that this income is not related to your main job:
- When asked if this income involves work like your main job, select "No".
Specify that this income is not self-employment income:
- When asked if this income involves an intent to earn money, select "No".

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sr3333Author

Hello @SabrinaD2 , thank you for the great explanation and steps.

i followed your instructions and i am taxed for the income, even though this is non taxable . Is there another steps I missed

B

BrittanyS

Since the 1099-MISC was reported to the IRS, the IRS will expect to see the income listed on the return. Use the steps above provided by SabrinaD2. Since the income is non-taxable, you must make an offset entry to remove the income. To adjust, follow the steps below:

Log into TurboTax
Select Wages & Income
Select Less Common Income
Select Miscellaneous Income, 1099-A, 1099-C
Click Start next to Other reportable income
Click Yes for Any Other Taxable Income
Enter a description of the income, for example, Nonpayroll Payment, and then the amount of the 1099-MISC as a negative. For example, -1,000

@sr3333

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