Level 3

Question

MN Grant for Child Care Providers 1099G

Forum|Forum|5 years ago
February 24, 2021
27 replies
115 views

MN has a grant that was given to childcare providers to help through COVID, they were issued a 1099G, on line 6 Taxable Grant. Now I understand this grant is suppose to be taxed on the Schedule C, but the program only puts it on the 1040.

1) Is this grant suppose to go on the Schedule C?

2) If yes, is there a fix to get it to link to the Schedule C?

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Terry53029

Intuit Community Champion

Don't enter it at all on the 1099G worksheet, as that is for unemployment, and state refund. If what you say i correct, then MN should have issued 1099NEC. It really doesn't matter, as you just fill out schedule C. 1099's don't get sent to IRS anyway

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SuesabellAuthor

Level 3

Are you sure the IRS won't try to link the 1099G to the return? ?

If you don't put a 1099 NEC on they will send a CP 2000 letter saying it wasn't reported even though it is on the C.

I have contacted the state, they say ask the IRS as they don't know and said it is a IRS form so ask them.

Even the people that issue the form don't know.

Anyone else from Minnesota here that has any idea?

Just-Lisa-Now-

Intuit Community Champion

"If you don't put a 1099 NEC on they will send a CP 2000 letter saying it wasn't reported even though it is on the C." This is not true, IRS does not cross match the actual 1099NEC, they only look for the income on the Sch C to match the income reported to them on the 1099NEC by the payer.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Just-Lisa-Now-

Intuit Community Champion

Ive never had one of these so Im not sure about the logistics, but I see a Quickzoom button on Line 5 of the Sch C to go to the 1099g worksheet, so it seems like you should be able to link from there? (assuming of course that the grant iIS subject to SE taxes, I know some of them aren't)

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Just-Lisa-Now-

Intuit Community Champion

Oh I see it, scroll down to Line 8a of the 1099g worksheet and double click to link to Sch C.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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SuesabellAuthor

Level 3

Tried this it won't let me as that is only for box 2.

IRonMaN

Level 15

The whole CARES act stuff and free money stuff from PPP has muddied up the waters a bit this year. If it was any other year I would enter it on schedule C and not think twice about it. Without any additional divine guidance, I guess I would go back to pre COVID thinking and add it to the schedule C. And I always manually enter totals on schedule C so I don't tend to worry about how 1099s are going to tie into the form.

Slava Ukraini!

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SuesabellAuthor

Level 3

So this form is not linked to the IRS computers yet? Because the 1099 NEC is. thanks!

Just-Lisa-Now-

Intuit Community Champion

the NEC is NOT directly linked to the IRS computer's only the income on the NEC is. You do not have to enter the actual 1099NEC, you canjust enter total income on Sch C.

In over 25 years Ive never entered a 1099 for NEC income into the program, I always enter the clients total business income on Line 1 of Sch C.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

IRonMaN

Level 15

I assume this is the money we are talking about.

FAQs: Peacetime Emergency Child Care Grants (myminnesotabusiness.com)

The State was paying providers money to keep their doors open so that essential workers with kids could go to work. That kinda sounds like they were paying to provide a service, so I would go with putting it on schedule C.

Slava Ukraini!

BobKamman

Level 15

Meanwhile, the parents were still paying the daycares for services they were providing. If Minnesota instead had made this a refundable tax credit, would it count as income? It will probably take a few years to resolve the question of whether this is self-employment income. Is childcare considered a combat zone? Does Minnesota qualify for foreign earned income exclusion?

IRonMaN

Level 15

"Is childcare considered a combat zone?"

Yes - at least as far as I am concerned. Those folks don't get paid near enough for what they do. Why do folks that take care of our most vulnerable (kids and the elderly) appear on the low end of the pay spectrum? But someone that can dunk a basketball or throw a baseball 90 mph is on the other end of the pay spectrum?

Slava Ukraini!

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