1099 NEC Sign on Bonus - How to File?

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BillQ
BillQ Member Posts: 1 Newcomer

Hello!

I signed a contract in Fall 2023 and received a sign on bonus/stipend shortly thereafter in the 2023 fiscal year though my official start date is Summer 2024. I have not provided any services for this company and received a 1099-NEC form for tax filing. I discussed with the company and they stated it is their standard to provide 1099s instead of W2s. There have not been any withholdings for this stipend and I acknowledge there will be taxes regardless.

My question is whether this should be filed as 'self-employed' income or whether I would need to file an SS-8 form with the IRS?

Thanks in advance

Best Answer

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 247
    edited February 27 Answer ✓
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    Hello Bquach,

    I recommend that you report the 1099-NEC just as you received it. Report it on the Schedule C as "self-employment" income. Keep in mind you can report any expenses related to that income. For example, you may have some Vehicle and Travel expenses. With a start-date this summer, you are technically not their employee, so a 1099 is appropriate.

    An SS-8 is used when you want to ask the IRS to determine if a worker is an employee or an independent contractor. Basically, telling the IRS and your new employer things were done incorrectly.