Level 2

Question

Self Employment Taxes on Taxable Grants reported in box 6 of Form 1099-G

Forum|Forum|5 years ago
February 19, 2021
28 replies
64 views

Taxpayer, using his LLC EIN, applied to the Wisconsin Economic Development Corp for a grant and received $2,500. The $2,500 was reported to the taxpayers LLC on form 1099-G in box 6 entitled taxable grants. ProSeries links box 6 (taxable grants) of Form 1099-G to Schedule 1, Additional income, line 8 Other Income bypassing Schedule C and thus avoiding Self Employment Taxes. Interestingly on line 8 of form 1099-G ProSeries asks if the amount reported in box 2 (state income tax refunds, credits or offsets) applies to income from a business and if so links box 2 to line 6 (other income) of Schedule C thus subjecting it to Self Employment Taxes.

Question - Are taxable grants reported in box 6 of form 1099-G exempt from Self Employment Taxes or does Intuit need to fix their software and link box 6 to Schedule C line 6 (other income)?

Thanks

MRH

ProSeries Basic

This topic has been closed for replies.

qbteachmt

Level 15

Here's the IRS topic:

https://www.irs.gov/newsroom/cares-act-coronavirus-relief-fund-frequently-asked-questions

The income would be offset by the appropriate and specific costs incurred for the narrow purposes of these grants. That makes it regular taxable income reported as usual as business income. It's supposed to cover extraordinary costs incurred to respond to the pandemic for that business to reduce the impact to that business.

Don't yell at us; we're volunteers

J

jeffrey

Level 5

The person, and myself as well is looking for the software issue, not what a taxable grant is about.

Client LLC received grant from city, (taxable). on the Schedule C I click on the "1099-G" I enter the information on a 1099-G worksheet. Including checking line 8 and 8a (link to Sch C line 6). The check mark errors red and the money does not go to shch c as it shoudl, but instead shc 1 as other income.

Also the software will not allow (without error) to put in the EIN of the Sch C business.

We need the amount off Sch1 and onto Sch C where it belongs.

qbteachmt

Level 15

@jeffrey

"The person, and myself as well is looking for the software issue, not what a taxable grant is about."

That's not what they asked. They have a Question: "- Are taxable grants reported in box 6 of form 1099-G exempt from Self Employment Taxes or does Intuit need to fix their software and link box 6 to Schedule C line 6 (other income)?"

However, I searched for you and found this topic:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/mn-grant-for-child-care-providers-1099g/00/131931

Don't yell at us; we're volunteers

A

AKGlover

Level 3

How did you end up entering this in ProSeries? The software is not working correctly for me, it will not link to Sch C as you mentioned in your original post.

sjrcpa

Level 15

Can't you just include it in Sch C income and skip any 1099-G specific input?

The more I know the more I don’t know.

J

jeffrey

Level 5

Well, my thought is with E-file and matching. The 1099-G has the EIN of the business, not the tp SSN, second, the software is making an error when we are in fact entering correctly.

P

pearl007

Level 2

Did you ever find out if a taxable grant reported on a 1099G could be claimed on a schedule C

sjrcpa

Level 15

@pearl007 That wasn't the question.

Of course a taxable grant to the Schedule C business can and should be reported on the Schedule C.

The more I know the more I don’t know.

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