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This article applies to:

  • Product: UltraTax CS
  • Return type: 1040 Individual

Screen 1099NEC - Nonemployee Compensation (1040)

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Overview

Use this screen to record nonemployee compensation information from Form 1099-NEC. The information entered here transfers to the related 1040 forms and schedules. This screen is available in the Income, Business, and Farm folders. When entering 1099NEC information in the Income folder, you can use this screen or the
Other Income
 statement in the Income screen, but don't enter the same item in both places.
note
  • Fields with a plus sign (+) at the end of the field name aren't used in the tax return, but are available for the Data Mining feature. You don't need to enter information in these fields unless you're using it for data mining purposes. Data also transfers to these fields from the Source Data Entry utility.
  • Fields with an asterisk (*) at the end of the field name are only applicable for the 1099NEC screen in the Income folder. Other fields are only applicable for the 1099NEC screen in the Business or Farm folders. Those fields will be grayed out and ignored.
Source data entry
Use the UltraTax CS Source Data Entry utility to enter data on facsimile versions of forms your clients submit for the preparation of their tax returns. Once the facsimile forms are completed, you can export the data and transfer it into your client data files via the data sharing feature. For more information including a list of available facsimiles, see UltraTax CS Source Data Entry overview.

General Information

State*
If you're processing a state return, enter the state postal code. Use this field only when you're entering 1099NEC information in the Income folder. When using this screen in the Business or Farm folder, this field uses the state entered on the C or F screen.
See State fields in UltraTax CS/1040 for more information.
Report income on Schedule C as Gross receipts
Use this field only when you're entering 1099NEC information in the Business folder. Enter
X
 in this field to have this income report on the Gross receipts line of the Schedule C instead of the Other income line.
Report income on Schedule F as Custom hire (Default is Schedule F Other income)
Use this field only when you're entering 1099NEC information in the Farm folder. Enter
X
 in this field to have this income report on the Custom hire income line of the Schedule F instead of the Other income line.
Federal/State applied to Box 1*
Use this field only if you're preparing multiple-state returns and entering 1099NEC information in the Income folder. For multiple-state returns, add multiple units of the 1099NEC screen as necessary to enter income separately by state; enter a different postal code in the
State
 field for each unit of the 1099NEC screen. Enter
S
 in the
Federal/State*
 field for all but 1 of the multiple 1099NEC screen units. The federal return disregards amounts coded S. For more information, see Processing multi-state returns.
Federal code applied to Box 1*
Use this field only when you're entering 1099NEC information in the Income folder and you need to categorize the income for proper reporting. These codes are also available in the
Other Income
 statement in the Income screen.
note
  • Items coded
    12
     will be included in Form 2555 calculations when Form 2555 is calculating. Also, when code 12 is present with an amount in the box 3
    Other income
     field, the amount reports on the Foreign Employer Compensation (FEC) Record and is part of federal taxable wages.
  • Michigan
    : If state withholding is entered with a Michigan postal code, the data will transfer to Michigan Schedule W automatically.
  • Utah
    : If state withholding is entered with a Utah postal code, the data will transfer to Utah Schedule TC-40W.
Subject to self employment tax
Use this field only when you're entering 1099NEC information in the Income folder to indicate whether the income is subject to self-employment tax. When this field is blank, the default is to treat the income entered as self-employment income.
Form 2555 allocation code
Use this field to allocate the income between the U.S. and foreign earned income reported on Form 2555 Allocation Worksheet. Income calculated as foreign earned during the assignment is used to calculate the Form 2555 exclusion. Foreign income earned before, during, and after the assignment is reported, less any applicable exclusion, by Form 1116 as eligible for the foreign tax credit. This code also allocates any related self-employment income.
Additional data entry is required on the 1116, 2555, and 2555-2 screens to report this activity on Forms 1116 and / or 2555. See the applicable input screen help for more information.
State use applied to Box 1*
Use this field only when you're entering 1099NEC information in the Income folder and you need to categorize the state income for proper reporting. The codes that are available in this field, which are the same codes in the
Other income
 field in the Income screen, are specific to the state entered in the
State
 field in this screen. If there aren't any applicable state use codes for the state entered, this field will be gray. The following table lists the state-specific codes available.
State
Code
Description
AZ
21
Enter code
21
 in the State use field to designate Native American income to be excluded from Arizona taxable income.
CA
2
Excl state lotto (used in conjunction with the
Federal code
 field, code 2)
CA
22
Excludable stock option (CQSO) (used in conjunction with the
Federal code
 field, code 17, to subtract CQSO income from wages)
CO
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Colorado taxable income.
CT
21
Enter code
21
 in the
State use
 field to designate Mashantucket or Mohegan Tribe enrolled member income to be excluded from income on the other subtraction line of Form CT-1040 or CT-1040NR/PY.
IA
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Iowa taxable income.
IA
25
Grants from the Injured Veterans Program. Use Federal code 19, Taxable Grants, and enter code 25 in the
State Use
 field to exclude the amount from Iowa income.
IA
27
Victim compensation awards. Use Federal code 4 or blank, Miscellaneous, and enter code
27
 in the
State use
 field to exclude the amount from Iowa income.
ID
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Idaho taxable income.
IL
9
Enter code
9
 in the
State use
 field to designate excludable riverboat / pari-mutuel winnings for Illinois part-year and nonresidents.
KS
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Kansas taxable income.
LA
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Louisiana taxable income.
MI
2
Excl state lotto
MI
4
Property tax refund
MI
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Michigan taxable income.
MN
10
AmeriCorps program award subtraction
MN
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Minnesota taxable income.
MS
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Mississippi taxable income.
MT
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Montana taxable income.
ND
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from North Dakota taxable income.
NE
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Nebraska taxable income.
NJ
2
Excl state lotto
NM
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from New Mexico taxable income.
NY
8
Subject to Yonkers nonresident earnings tax
NY
23
Form MTA
NY
24
Form MTA and Yonkers nonresident earnings tax
OK
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Oklahoma taxable income.
OR
2
Use code 2 to designate Oregon lottery winnings of $600 or less per ticket which will exclude those amounts from Oregon taxable income
OR
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Oregon taxable income.
PA
2
Excl state lotto
PA
3
Business, profession or farm income
PA
11
Executor fee
PA
12
Jury duty pay
PA
13
Director fee
PA
14
Expert witness fee
PA
15
Honorarium
PA
16
Covenant not to compete
PA
17
Damages or settlement for lost wages
PA
18
Other nonemployee compensation
UT
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Utah taxable income.
WI
21
Enter code
21
 in the
State use
 field to designate Native American income to be excluded from Wisconsin taxable income.
Delete on next year's proforma
Enter
X
 in this field to delete the content from this screen during next year's proforma.
note
If data transferred to this screen through the Source Data Entry utility, related screen data should be reviewed for duplicate proforma'd information. For example, if the 1099NEC screen is linked to Schedule C, review the descriptions proforma'd to the
Other income
 statement in the C screen for duplicate entries. Don't enter amounts for identical items in both places, as the amount of other income will be overstated.

1099-NEC Facsimile

Use this section to enter the information directly from Form 1099-NEC. If the taxpayer received more than one Form 1099-NEC, enter the information in additional units of this screen.
Payer's address
Enter the payer's address as reported on Form 1099-NEC. This information is required for some state products.
Nonemployee compensation
Data entered in this field is reported on the related form or schedule. The following table lists where the amount is reported on the applicable form.
Form/Schedule
Line
Form 1040
Schedule 1, line 8z, Other income, unless certain codes are selected in the
Federal/State applied to Box 1
 or
Federal code applied to Box 1
 fields.
Schedule C
line 6, Other income, unless the
Report income on Schedule C as Gross receipts
 field is marked
Schedule F
line 8, Other income, unless the
Report income on Schedule F as Custom hire
 field is marked
Federal income tax withheld
Data entered in this field will be included in the federal income tax withheld lines of Form 1040, Page 2.
State tax withheld / State/Payer's state no.
Enter the postal code, withholding, state amount, and state payer's identification number in these fields. State withholding amounts entered here transfer to Schedule A, line 5. Several states use this information to complete electronic filing records, withholding worksheets, and records for 2-dimensional (2D) bar code purposes. See State fields for more information.
State income
Enter the amount of state income in these fields. Entries in these fields are used to complete state 2-dimensional (2D) bar codes and/or electronic filing records for select states when state withholding is also present; however, they don't affect state return calculations.
States that use these fields:
States
Description
CO
If
CO
 is entered in the Box 16
State
 field and an amount is entered in the Box 16
Amount
 field, a state income amount must be entered in the Box 18
State income
 field. This information is used to complete a record for electronic filing and the 2D bar code when Colorado withholding is present in the 1099NEC screen.
IN
Amounts entered in Box 16
Amount
 fields for state withholding are included in the calculation of the Indiana return if
IN
 is entered in the corresponding Box 16
State
 field. Box 16
Amount
 fields are also included as supporting information in the electronic filing record. Amounts entered in Box 18
State income
 fields don't affect the calculation of the Indiana return. The Indiana Department of Revenue requires this information when Form 1099-NEC includes Indiana withholding in Box 16.
MA
Paper-filed Resident returns:
 Amounts entered in Box 16
Amount
 fields are included on the Massachusetts return and Schedule INC if
MA
 is entered in the corresponding Box 16
State
 field. Per specifications, amounts entered in Box 18
State income
 fields are included as supporting information on Massachusetts Schedule INC regardless of the postal code in Box 16.
Paper-filed Nonresident and Part-year Resident returns:
 Amounts entered in Box 16
Amount
 fields are included on the Massachusetts return and Schedule INC if
MA
 is entered in the corresponding Box 16
State
 field. Per specifications, amounts entered in Box 18 for
State income
 are included as supporting information on Massachusetts Schedule INC if
MA
 is entered in the corresponding Box 16
State
 field.
note
Amounts entered in the Box 18
State income
 fields don't affect the calculation of the Massachusetts return. However, the Massachusetts Department of Revenue still requires this information from Form 1099-M for paper-filed returns regardless of whether or not Form 1099-NEC includes state withholding.
Electronically filed returns:
 Information from Form 1099-NEC is included in the Massachusetts electronic record.
MN
If
MN
 is entered in the Box 16
State
 field, the Box 16
Amount
, Box 17
State/Payer's state no.
, and Box 18
State income
 fields automatically transfer to Minnesota Form M1W.
NY
If
NY
 is entered in the
State
 field at the top of the 1099NEC screen, the first Box 18
State income
 field is transferred to the New York NYOthWH screen. The information is only used to complete a record for electronic filing when New York withholding is present in the 1099NEC screen.
UT
If
UT
 is entered in the box 16
State
 field, the data in the
FIN
;
Payer's name
;
Payer's address, and ZIP code
; Box 16
Amount
; Box 17
State/Payer's state no.
; and Box 18
State income
 fields automatically transfer to Utah Schedule TC-40W. All fields are required to be completed for the Schedule TC-40W if there are Utah withholdings.
VA
If
VA
 is entered in the Box 16
State
 field, the Box 16
Amount
, Box 17
State/Payer's state no.
, and Box 18
State income
 fields automatically transfer to Virginia Schedule INC/CG.

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