Client received a 1099-Misc for an Adoption Subsidy (from State of Indiana). Not seeing much in my research yet. The 1099-Misc shows $4,500 in Box 7 Nonemployee Compensation. Not sure how to report on the 1040. It appears that the $4,500 may not be taxable from some initial research. Can anyone point me to more specific information?
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Don’t know where you have researched but hopefully this is a start:
https://www.irs.gov/newsroom/nine-fa...doption-creditAlways cite your source for support to defend your opinion -
Did the client work for the State of Indiana? Was this a subsidy due to a hard-to-place child in foster care or a ward of the state? It may not be taxable, see the above references. In any event, it should NOT have been reported in Box 7, but reported as Other Income, Box 3, *IMO.Comment
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Also, see Form 8839 and instructions.Comment
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As you may have the Indiana info., if not, see below:
Indiana State Adoption Assistance Program
100 N Senate Ave
Room N848 MS48
Indianapolis, IN 46204
317-234-5841
Jennifer.Haselwander@dcs.in.gov
Always cite your source for support to defend your opinionComment
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