aidkit, inc 1099 for daycare "teachers" Taxable or freebie? VERY INTERESTING.

[Pacun]

Daycare workers who were considered "teachers" received up to $17000 in 2022 and they will get it for 3 years, I believe. 1099-NECs were issued. Since this is work related, I reported this using 1099-NEC flowing to schedule C with 0 deductions since this was received by virtue of job title. 

1099-NECs were promptly received by each taxpayer in February and they were informed in several meetings to set aside money for taxes.  Yesterday, the "teachers" received a corrected 1099-NEC reporting 0 income.  I wonder if that money will be tax free and taxpayers will NOT pay the IRS but will pay ME for amendments. Any info about this will be appreciated.

 

[Lee B]

AidKit Inc. appears to be a fintech that offers a online payment channel to nonprofits that help low income people who are unbanked.

https://osse.dc.gov/sites/default/files/dc/sites/osse/page_content/attachments/2022 Tax Filing Resources - English.pdf

[Pacun]

I just received an update on this situation.  They issued a 1099-NEC and I told two of my clients that they had to pay social security taxes because of the form used.  Sure enough, they issued a 1099-NEC with 0 and they will be issuing a 1099-Misc this week.  So, I will have to amend my 6 clients and exempt them from SS taxes. 

By the way this is ONLY for DC day care "teachers".