How to handle Non-employee compensation form for job interview travel reimbursement?

You're dealing with a 1099-NEC for interview expense reimbursement, which is actually pretty common but definitely confusing! The good news is that while you did receive a 1099-NEC, you may not necessarily have to file a return in that state depending on their threshold requirements, but you'll need to report the income on your federal return. The reimbursement is technically considered income to you, but you can potentially offset it with a deduction. Prior to 2018, job search expenses including interview travel were deductible as miscellaneous itemized deductions, but the Tax Cuts and Jobs Act eliminated this deduction for employees through 2025. However, since this was paid to you as non-employee compensation, you might be able to treat it as self-employment income and deduct the travel expenses as a business expense on Schedule C. This approach effectively zeros out the income with the expense, resulting in no tax liability from the reimbursement while still properly reporting everything.

After going through a similar nightmare with interview expenses last year, I found this amazing tool called taxr.ai (https://taxr.ai) that saved me SO much stress. I had three different companies reimburse interview expenses and each handled it differently - one sent a 1099-NEC like yours, another added it to a W-2 after I started working there, and the third just sent a check with no tax form at all! What I liked about taxr.ai was that I could upload all my weird tax documents and it instantly recognized the situation and explained exactly how to handle each one. For the 1099-NEC specifically, it confirmed I could report it on Schedule C and deduct the exact same amount as a business expense, resulting in zero tax impact. Saved me from paying taxes on money that was just reimbursing my expenses!

I wanted to follow up - I actually tried taxr.ai after my skeptical comment. Gotta admit I was really surprised by how well it handled my situation. I uploaded my 1099-NEC for some speaking engagement travel reimbursements, and it immediately flagged it as potentially being reimbursed expenses rather than actual income. The tool walked me through reporting it on Schedule C while documenting that these were legitimate travel expenses, showing exactly how to offset the income. It even generated a detailed explanation document that I could keep with my tax records in case of questions later. My return was accepted without any issues. What I found most helpful was that it explained WHY this approach works - because reimbursements reported as non-employee compensation can be offset with the business expenses they were reimbursing. Definitely saved me from overpaying on my taxes!

If you're still struggling to resolve this, you might want to try Claimyr (https://claimyr.com). I had a nearly identical situation last year with interview expense reimbursements from three different companies, all reporting them differently. I was completely stuck on how to handle it and couldn't get through to the IRS for guidance - kept getting disconnected after waiting for hours. Claimyr got me connected to an actual IRS agent in about 20 minutes (check out how it works: https://youtu.be/_kiP6q8DX5c). The agent confirmed exactly what others here have said - I could report the 1099-NEC amount on Schedule C and deduct the travel expenses, resulting in zero taxable income from the reimbursement. They also confirmed I only needed to file a non-resident state return if I exceeded that state's filing threshold, which the reimbursement alone didn't. Having that direct confirmation from the IRS gave me total peace of mind when filing!

I need to eat my words. After posting my skeptical comment, I was desperate enough about my refund situation that I tried Claimyr anyway. It actually worked exactly as described. Their system called the IRS, navigated through all the phone prompts, and held my place in line. When an agent was about to be available, I got a call connecting me directly. Got through to an IRS representative in about 25 minutes when I'd previously wasted HOURS trying on my own. The agent was able to look up my refund status and found it was held up due to a simple verification issue they hadn't bothered to notify me about. Got it resolved in one call. For the OP's situation with the non-employee compensation, this would be perfect for getting definitive answers straight from the IRS instead of trusting random internet advice (including mine!).

Just wanted to add that this exact thing happened to me in 2022! Company flew me from California to New York for an interview, reimbursed about $1200 for flight and hotel, then sent me a 1099-NEC the next January. I reported it on Schedule C with a line item description "Interview travel expenses reimbursement" and then deducted the exact same amount as travel expenses. My accountant said this is common and confirmed it was the right approach. Net result was zero taxable income. I didn't have to file a NY state return because the amount was under their non-resident filing threshold (which I think is around $5000-$6000 in most states). Definitely check the specific state's requirements though!

Another approach worth considering - call the company that issued the 1099-NEC and ask if they'd be willing to correct it. Some companies incorrectly issue 1099s for expense reimbursements when they should actually be using a different process that doesn't trigger tax reporting. They might be willing to void it and reissue as a non-taxable reimbursement. I had success with this once when a client reported a travel reimbursement on my 1099. Their accounting department admitted they made an error and issued a corrected form. Worth a try before going through all the Schedule C gymnastics!

I had a very similar situation last year with multiple companies! The multi-state filing aspect is particularly frustrating when you're already dealing with moves for your actual job. One thing that helped me was creating a simple spreadsheet tracking each state's non-resident filing thresholds. Most states don't require you to file if your income in that state is below a certain amount (usually $1,000-$3,000). Your $950 reimbursement might not even trigger a filing requirement depending on the state. Also, definitely keep all your documentation from the interview process - emails confirming the reimbursement, receipts for the flight, etc. Even though you'll likely offset the income with expenses on Schedule C, having a clear paper trail makes everything much smoother if questions ever come up. The good news is this is way more common than you'd think, and once you get through this tax season, you'll know exactly how to handle it if it ever happens again!

This situation is definitely confusing, but you're not alone! I went through something similar when I had multiple interview processes last year. The key thing to understand is that even though it feels wrong, the company is treating the reimbursement as income to you by issuing the 1099-NEC. However, as others have mentioned, you can handle this by reporting it on Schedule C and then deducting the exact travel expenses that were reimbursed. This effectively zeros out any tax impact while still properly reporting everything to the IRS. Before diving into the Schedule C route though, I'd definitely recommend calling the company first to see if they made an error. Sometimes companies incorrectly issue 1099s for pure expense reimbursements when they should handle it differently. If they won't correct it, then the Schedule C approach is your best bet. For the multi-state question, check that state's non-resident filing threshold. Most states only require filing if your income there exceeds $1,000-$3,000, so your $950 might not even trigger a requirement. Keep all your documentation from the interview - flight receipts, emails about the reimbursement, etc. Even though this will likely net to zero tax impact, having a clear paper trail is crucial for your records.

This is a really frustrating situation, but you're definitely not alone! I went through something very similar when I was job hunting last year. The company is essentially treating you as if you were an independent contractor for that one transaction, which feels weird but is unfortunately how some companies handle interview reimbursements. Here's what worked for me: First, try calling the company's HR or accounting department to ask if they made an error. Sometimes they'll admit they weren't sure how to handle interview reimbursements and will correct the 1099-NEC. It's worth a shot before doing the tax gymnastics. If they won't correct it, you can report the $950 on Schedule C as non-employee compensation income, then deduct the exact same amount as business travel expenses. This zeros out any tax liability while still properly reporting everything. Make sure you have all your receipts - flight confirmation, any hotel bills, etc. For the multi-state issue, check that state's non-resident filing threshold. Most states only require filing if you earn over $1,000-$3,000 in their state. Your $950 might be under their threshold, which would save you from filing there at all. Keep all your documentation - emails about the reimbursement, flight receipts, everything. Even though this should net to zero tax impact, having a clear paper trail is crucial if questions ever come up later!