How to enter Form 1099-NEC, Nonemployee Compensation in ProConnect Tax

For tax year 2025 the IRS did not have specified mandated reporting requirements on how to report Qualified Tips and Overtime on the 1099-NEC. These may need to be manually calculated. See guidance here.

Table of contents:

Where to enter box 1, nonemployee compensation for self-employed individuals:

 You should include the amount on Schedule C or Schedule F as gross receipts. 

1. Go to Input Return ⮕ Income.
2. Click on the Business Income (Sch C) screen, or the Farm Income (Sch F, 4835) screen.
3. Select the Income Statement section along the top of the input.
4. Enter the amount in Gross receipts or sales for Sch. C filers, or the appropriate farm income field for Sch. F.

Back to Table of Contents

Where to enter box 1, nonemployee compensation for employees:

If your client is an employee and received Form 1099-NEC in lieu of a W-2, they should request corrected tax forms from the payer. 

If they can’t get the correct forms:

1. Go to Input Return ⮕ Income ⮕ SS Benefits, Alimony, Misc. Income
2. Scroll down to the Alimony and Other Income section.
3. Enter the amount in Uncollected social security and Medicare tax on wages (8919).

The compensation amount will be reported on the 1040 as wages and will be used to complete Form 8919.

Back to Table of Contents

Where to enter box 1, nonemployee compensation for income from a hobby or sporadic activity:

1. Go to Input Return ⮕ Income ⮕ SS Benefits, Alimony, Misc. Income
2. Scroll down to the Alimony and Other Income section.
3. Enter the amount and a description in Other income (Click on button to expand).

The amount will be reported on Form 1040, Schedule 1, line 8, as other income, and will not be treated as subject to self-employment tax or uncollected social security and Medicare on wages.

Back to Table of Contents

Where to enter boxes 4-7, state and federal withholding:

To claim tax withheld on 1099-NEC income, the IRS and most states require ProConnect Tax to recreate a digital copy of the Form 1099-NEC your client received and include it in the e-filed return. ProConnect Tax uses your input in Form 1099-MISC/NEC for E-File Returns to meet this agency requirement, and to report withholding amounts on the appropriate federal or state return.

1. Go to Input Return ⮕ Income ⮕ SS Benefits, Alimony, Misc. Income
2. Select the Form 1099-MISC/NEC hyperlink at the top right of the input.
3. Enter the Payer Information from Form 1099-NEC.
4. Scroll down to the 1099-NEC subsection.
5. Enter the box 1 amount in (1) Nonemployee compensation.
6. Enter the box 4 amount in (4) Federal income tax withheld.
7. Enter the box 5 amount in State tax withheld, and select the appropriate state from the drop-down menu.
8. Enter the box 6 amount in Payer’s state no.
9. Enter the box 7 amount in State income.

Important: Income amounts entered on this screen, including (1) Nonemployee compensation and the box 7 State income entry, will not flow to the tax returns. You must follow the steps above for entering box 1 amounts in addition to completing this screen when withholding is present.

However, federal and state tax withheld entered on this screen do flow to the appropriate line of the tax return (Form 1040, line 25b, for federal amounts). This withholding should not be duplicated or re-entered anywhere else in the tax return.

Back to Table of Contents

Entering Qualified Tips and Overtime for the Schedule 1-A for tax year 2025

To enter an amount to show on Schedule 1-A line 5 as qualified tips from 1099-NEC:

1. Go to Input Return ⮕ Miscellaneous Income.
2. Scroll down to the Form 1099-NEC section.
3. Enter the amount as Cash tips.
   • Only the amount greater than the amount in box (1) Nonemployee compensation will show on Schedule 1-A line 5.

To enter the amount of overtime on a 1099-NEC for the Schedule 1-A line 14b:

1. Go to Input Return ⮕ Miscellaneous Income.
2. Scroll down to the Form 1099-NEC section.
3. Enter the amount as Overtime compensation.

Back to Table of Contents

For more Schedule C resources, check out our Tax topics page for Schedule C where you'll find answers to the most commonly asked questions.