Welcome back! Ask questions, get answers, and join our large community of tax professionals.
Showing results for 
Search instead for 
Did you mean: 

Nonqualified deferred compensation

Level 3

Client receives a 1099-MISC with Box 14 amount of $14,000 for Nonqualified Deferred Compensation.  It is from a previous employer who sold and went out of business (so penalty should not apply, correct?).  How/where do I enter this in the tax return?  Is there anything else I need to be aware of?  I assume SE tax will apply since it was deferred comp.  Considering putting it as a 1099-NEC, box 1, transaction.   Any insight would be appreciated!

Labels (1)
0 Cheers
2 Replies 2
Level 15

"I assume SE tax will apply since it was deferred comp."

From being an employee and FICA should have previously been withheld on it.

"Considering putting it as a 1099-NEC, box 1, transaction."

But you would not enter a 1099-NEC unless the taxpayer is given a 1099-NEC. You have a 1099-Misc to use, already.

This type of payout should be reported on W2, but perhaps this is payout from a trustee.

"Level Up" is a gaming function, not a real life function.
Level 3

As it turns out, client just sent me a Corrected 1099-MISC with all 0's!  Looks like somebody caught the mistake.  Thank you.

0 Cheers