I received a relocation lump sum in 2006. I had just accepted a job while a senior in college and would be moving from SF to NY to start work so this lump sum was to help with the moving expenses. I received a flat amount with no taxes taken out. During tax season in 2007, the company sent me a form 1099-misc for this amount. Thinking that I was accounting for this correctly, I filed it in line 21 "other income" on my form 1040 on my tax return. I receive a notice now saying that I owe money for self-employment tax. Is this correct? Do I have to pay this or did I just file my taxes incorrectly? Should I have included it in the "wages and salary" line instead?

Is this really considered self-employment tax even though I received it from my employer? What should I do?

Any information would be great. I need a response relatively soon as this is time sensitive and I already have to pay interest on what I didn't pay last year! =(

If this is still a problem, contact me via PM or email and I will propose a solution via email.