Childcare Reimbursement Grant 1099-NEC issue

[TaxNoviceMike]

I am in an electrical apprenticeship program in California, our training center partnered with a program called EricaPay to help with the cost of Childcare, supplies and expenses while in the apprenticeship. This money ($9,999.96) is/was a grant from the state, but I am receiving a 1099-NEC.

TurboTax seems to guide me to file this as Self-employment  income and expenses. When I do this, it all but eats up my $4000 child credit (2 kids) + other credits/deductions which does not seem right. In my mind it should be taking 10.2-20% out of the $9999.96.

The money did not come from a business that I operate so it doesn’t seem right to “create” a business and “write off” the food + diapers. 

Is there somewhere to add this to income as a grant or something.

Happy to provide more information if needed

[AmyC]

Yes,  you need to answer the questions in the right way for your situation. Delete the 1099-NEC you have entered. see How to Delete. Now, I recommend you close the program and clear cache and cookies, but it may not be necessary.

Let's enter the 1099-NEC. Follow these steps:

1. Open your return to the federal income section.
2. Locate income from Form 1099-NEC
3. Start/ Edit/ Revisit/ Review
4. Select Yes to did you receive NEC
5. Select add a 1099 -NEC or edit
6. Enter payer, id, and compensation
7. Continue
8. Reason for NEC - state grant
9. Continue
10. Uncommon Situation - select not money as employee or self-employed. Sporadic activity
11. Continue
12. Done

[TaxNoviceMike]

Thank you for the quick response, on my end I don’t have the “this is not money as an employee or self-employed individual” option

I tried the “Hobby” option but it does not further drill down into a reason for NEC or an option like you have on your screen.

any idea why I might be seeing this or offered this option. To confirm I don’t have the option on either tablet or desktop

[DianeW777]

Yes, in the screen shown you would select Hobby.  If you prefer you can delete that 1099-NEC and report it as Other income using the steps below.

This would allow a description entry for the payment.

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section 
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount

@TaxNoviceMike