Caregiver Paid Lump Sum for 2 years work

[kam]

An Aunt cares for her disabled nephew. The nephew's trust gave her a single check for 5 months of care in 2020 and 12 months of care in 2021 (no 1099-MISC will be issued). I think the fair/logical thing to do would be to just claim the 2021 income only on the 2021 return (I looked and the 2020 income does not change her 2020 return). But I see some references that imply that income needs to be reported in the year received, regardless of year earned. Which is correct? Thanks

[Anarchrist]

Cash based taxpayer reports on the cash basis.

Fair/logical isn't relevant.

[DoubleO]

Would a W2 be appropriate here? It does not say where aunt provided the care.
lf all paid in 2021, then 2021 income. However, from your post, sounds as if aunt may qualify for EIC for 2021. I would at least insist she get either a 1099 NEC or a W2 from the trust, whichever one is appropriate.

[kam]

Thank you both Anarchrist & Double O. Trust refuses to send 1099-MISC or NEC (regarding EIC, income just barely above EIC limits so that doesn't matter). You both agree if all income paid in 2021, then it must go on 2021 return. One final thought-I guess you can't apply the Social Security Lump Sum rules that allow allocating the income across years?

[TaxGuyBill]

Trust refuses to send 1099-MISC or NEC

You both agree if all income paid in 2021, then it must go on 2021 return.

One final thought-I guess you can't apply the Social Security Lump Sum rules that allow allocating the income across years?

Only businesses need to issue 1099s; a Trust would not need to do that.

Yes, they are both correct.

No, that rule only applies to Social Security (there may be a similar option for farming income too).

[kam]

Thanks to all of you for responding...

[Dude]

dont forget to ask for mileage and out of pocket expenses for the schedule C. Sometimes care providers have more expenses than you would think.

[DoubleO]

dont forget to ask for mileage and out of pocket expenses for the schedule C. Sometimes care providers have more expenses than you would think.

I’d recommend these expenses be reimbursed. I still think there may be W2 issues. Who hired the aunt?