How do you treat entries in Box 6 - Medical and Health payments - for tax purposes? Is this other income, Schedule C income, of is it exempt from taxation?
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Sometimes it is
Sometimes it is exempt. It may be qualified foster payments, difficulty of care payments or the like. However, sometimes it is taxable as C income (see the box instructions).
My question to the payer (the state) is why send them out when they are exempt. The answer is they send them out to everyone and then the recipient calls it exempt. (Not what the 1099 instructions say to do.)
So, the best bet is call your client, ask for a contact number, call and ask if theirs is exempt income.
The code section is 131 - difficulty of care is (c)JG -
Well first off..
you usually see these in connection with some sort of medical practice. Dentist, Doctor, etc.
If that is the case then it's ordinary business income to the recipient.Comment
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I have a client with 8 of the 1099-misc with income in box 6--all taxable; she is a Family Nurse Practitioner-she bill the insurance companies for service renderComment
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