Other income line 21

[ILLMAS]

TP daycare union covers part of her health insurance and issue her a 1099 with the amount of box 7, however it's reported on line 21 as other income.   IRS sent her a notice that the amount was non-employee compensation and is subject to SE taxes, can a quick phone resolve this issue?

[Lee B]

Unless it meets the tax free fringe benefit exception via the entity who pays your client,

how do your avoid the SE Tax ?

[RitaB]

I agree with cbslee.  I don't know why it was on Line 21.

[Max W]

I have a W-2 client who was paid to buy her own insurance.  No 1099 was issued.  Handled payment on Sch C and took the SE HI as an adjustment.  It wasn't a wash because of the SE tax.   Another way to do it is to enter it on Line 21, then generate the SE form.

[joanmcq]

But she is NOT  not self employed though, and that reimbursement policy is worth a $100/ day per employee penalty to her employer, which is probably why she just got cash. 

I wouldn't sign a return with your creative solution.