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1099-MISC Box 3: Other Income and Where It Goes (Rev. 12-2026)

Updated October 16, 2026. Quick answer: Box 3 of Form 1099-MISC shows other income that does not belong in another box, including prizes, awards, taxable damages, Indian gaming profits and payments to the beneficiary of a deceased employee. It concerns anyone who received one of those payments. The recipient instructions send it to the Other income line of Schedule 1 (Form 1040), or to Schedule C or F if it is trade or business income.

Read box by box from the IRS form text: Form 1099-PATR boxes 1, 2, 3 and 5, Form 1099-PATR box 4 and Form 1099-PATR boxes 10 to 13.

Schedule C and Schedule SE (Form 1040) for 2025, read line by line: Schedule C lines 6 and 7.

Schedule 1 (Form 1040) for 2025, read line by line: Schedule 1 lines 2a and 2b, Schedule 1 lines 8a and 8b and Schedule 1 line 24.

Related reading on this site: Form 1099-NEC filing deadline.

What box 3 reports

The recipient instructions list the contents: “The amount shown may be payments received as the beneficiary of a deceased employee, prizes, awards, taxable damages, Indian gaming profits, or other taxable income.” “See Pub. 525.” The payer instructions describe the catch-all role: “Enter other income of $2,000 or more required to be reported on Form 1099-MISC that is not reportable in one of the other boxes on the form.” Every other box is set out on the 1099-NEC and 1099-MISC boxes overview and on the Form 1099-MISC overview.

Where the amount goes

The default destination is “Generally, report this amount on the “Other income” line of Schedule 1 (Form 1040) and identify the payment.” There is one exception that turns on the nature of the income: “If it is trade or business income, report this amount on Schedule C or F (Form 1040).” Royalties and rents have their own boxes and are covered on the box 2 page and the box 1 page, and self-employment tax is explained on the self-employment tax page.

Prizes and awards

Prizes are in box 3 when they are not pay for work. “Also, enter in box 3 prizes and awards that are not for services performed.” “Include the fair market value (FMV) of merchandise won on game shows.” “Also, include amounts paid to a winner of a sweepstakes not involving a wager.” “If a wager is made, report the winnings on Form W-2G.”

A prize for work goes elsewhere. “Do not include in box 3 prizes and awards for services performed by nonemployees, such as an award for the top commission salesperson. Report them in box 1a of Form 1099-NEC.”

Damages

Damages are one of the categories the payer instructions list for box 3. “Generally, all punitive damages, any damages for nonphysical injuries or sickness, and any other taxable damages.” The list has exceptions. Other than punitive damages, damages received on account of personal physical injuries or physical sickness are not reported, and neither are damages received on account of emotional distress due to physical injuries or physical sickness. Damages for emotional distress that did not come from a physical injury or sickness are reportable unless another stated exception applies. “Also, report liquidated damages received under the Age Discrimination in Employment Act of 1967.”

Payments to a deceased employee’s estate or beneficiary

Box 3 is where this payment lands. “Whether the payment is made in the year of death or after the year of death, you must also report the payment to the estate or beneficiary on Form 1099-MISC.” “Report the payment in box 3 (rather than as nonemployee compensation).”

The instructions work an example. In it, a payment of accrued wages and vacation pay to the estate is shown as “3,000.00 (Even though amounts were withheld for social security and Medicare taxes, the gross amount is reported here).” The point for a recipient is that box 3 shows the gross payment, not the amount after those taxes.

Indian gaming profits

The payer instructions give the box assignments: “Report the payments in box 3 and the federal income tax withheld in box 4.” The tax withheld side is covered on the box 4 page.

Studies, grants and other items

Other items on the payer list include “A payment or series of payments made to individuals for participating in a medical research study or studies.” and “A payment or series of payments made to individuals to achieve a specific objective, produce a report or other similar product”. The recipient copy’s catch-all phrase, other taxable income, covers items like these.

Self-employment tax and estimated payments

The recipient copy also carries a general note about self-employment tax. “Amounts shown may be subject to self-employment (SE) tax.” “Individuals should see the Instructions for Schedule SE (Form 1040).” The tax itself is explained on the self-employment tax page.

For how estimated payments work, see the quarterly estimated taxes page.

If the form is wrong

If a figure looks wrong, the form itself says what to do. “If this form is incorrect or has been issued in error, contact the payer.” “If you cannot get this form corrected, attach an explanation to your tax return and report your information correctly.”

Edition and box numbers

The December 2026 revision of the form and of the instructions was the primary read for this page. Boxes 1 to 4 of Form 1099-MISC carry the same numbers on the 2025 form and on the December 2026 form. The numbering that did change is on Form 1099-NEC, where the December 2026 form says “Box 1a. Shows your total nonemployee compensation.” and the 2025 form says “Box 1. Shows nonemployee compensation.” (box 1a on the new form, box 1 on the 2025 form). The payer threshold for box 3 changed between editions: the 2025 edition says “Enter other income of $600 or more required to be reported on Form 1099-MISC that is not reportable in one of the other boxes on the form.” irs.gov served both editions when they were read on 2026-10-16. Check the revision printed on the form you received, because the box numbers and the payer thresholds are tied to the edition.

Common mistakes

  • Putting every box 3 amount on Schedule C. The recipient instructions say to report it generally on the Other income line of Schedule 1 and on Schedule C or F only if it is trade or business income.
  • Treating a prize for work as a box 3 prize. The payer instructions say prizes and awards for services performed by nonemployees go in box 1a of Form 1099-NEC, and box 3 holds prizes and awards that are not for services performed.
  • Assuming all damages are taxable. The payer instructions say damages received on account of emotional distress due to physical injuries or physical sickness are not reportable, while punitive damages and other taxable damages are.

Related: Form 1099-MISC overview, self-employment tax, quarterly estimated taxes, 1099 basics for hiring help, and Schedule E (Form 1040).

Sources

Read from the IRS documents linked above on October 16, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.

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