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Form 1099-MISC - Section 409A Deferrals
1

To enter or review the information from Form 1099-MISC Miscellaneous Income, Box 12:

  1. From within your TaxAct return (Online or Desktop), click Federal. On smaller devices, click in the upper left-hand corner, then click Federal.
  2. Click Form 1099-MISC in the Federal Quick Q&A Topics menu, click + Add Form 1099-MISC to create a new copy of the form, then continue until you reach the screen titled 1099-MISC: Enter information on form.
  3. Click the Switch to Form Entry (optional) link near the top to open the Quick Entry window, enter all of the applicable information from your Form 1099-MISC (including Box 12), then click Save & Close.
  4. Select the appropriate option to assign the Form 1099-MISC you are currently completing from the Assigned schedule or form drop-down - either "Schedule C" or "Other Income", then click Continue.
  5. If you had selected an "Other Income" option from the drop-down, then on the screen titled Please confirm that the income on this Form 1099-MISC is non-business income, check I confirm that the income reported on this Form 1099-MISC is non-business income and is not subject to self-employment taxes if applicable, then click Continue.

There is a 20% tax on the amount you enter from IRS Form 1099-MISC, Box 12 Section 409A income. This amount will be included in the total of Schedule 2 (Form 1040) Additional Taxes, Line 8.

Note. Line 8 of Schedule 2 (Form 1040) may have items included from Other Taxes. When the form is printed, the total amount of Other Taxes will print to the left, and the text printed to the left of that amount will define the type of tax.

According to IRS Instructions for Form 1040 and 1040-SR, you should include in the total on Line 8 any additional tax on income you received from a nonqualified deferred compensation plan that fails to meet certain requirements. This income should be shown in Box 12 of Form W-2 Wage and Tax Statement with code "Z" or in Box 12 of Form 1099-MISC. The tax is 20% of the amount required to be included in income plus an interest amount determined under section 409A(a)(1)(B)(ii). See Section 409A(a)(1)(B) for details. Identify as "NQDC."

If you also have federal and/or state tax withholding reported, see Form 1099-MISC - Federal or State Withholding.

To view the Other Taxes - Supporting Details worksheet for Schedule 2 (Form 1040), Line 8:

Online Navigation Instructions
  1. From within your TaxAct Online return, click Print Center down the left to expand, then click Custom Print.
  2. Check the items you wish to print (the top section contains individual forms or schedules and the bottom section contains documents or worksheets). You may need to scroll down in the section to locate the items you need.
  3. Click Print, then click the PDF link. Click the printer icon or the save icon (available when you hover your mouse over the bottom of the PDF form) to print or save the PDF copy.

Note. If you see a message indicating you have not paid your return fees, click the View/Pay your return fees link, which will direct you through the Paper Filing steps. Continue through the screens until you have processed the payment for your product fees and then repeat the steps to print.

Desktop Navigation Instructions
  1. Click Forms in the menu bar.
  2. Click to expand the Federal folder, then click to expand the Worksheets folder.
  3. Click Form 1040 Other Taxes - Other Taxes Worksheet from the list.

Note that any link in the information above is updated each year automatically and will take you to the most recent version of the document at the time it is accessed.