1099-NEC research stipend showing state tax

Forum|Forum|5 years ago
March 22, 2021
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Hi all, I received a stipend (3k) for research I did in the summer of 2020. I received 1099-NEC for this.

It has

Box 1: 3k (non employee compensation)

Box 4 (federal tax withheld): 0

Box 5 (state tax withheld): 0

Box 7 (State income): 3k

I am confused why the 3k are reported in both Box 1 and Box 7

I have another 1099-NEC but it only reported Box 1. Not Box 7.

Is this a mistake, or should I pay both federal and state tax on this particular stipend?

Thank you for your help!

LenaH

No, this is not a mistake. Generally, stipends are considered taxable income at the federal and state level. However, the income will flow to your state return whether or not Box 7 is filled out on your 1099-NEC. It does not mean a mistake was made on one of your forms or that only one of your 1099-NEC's are taxable at the state level.

In addition, it is also important to answer all the questions that follow your input of your 1099-NEC forms. Since this is likely not self-employment income, you would enter your 1099-NEC and have it flow to Other Income, rather than a Schedule C (self-employment income).

Please follow the steps below to enter your 1099-NEC's:

Open your return.
Search for 1099-NEC with the magnifying glass tool at the top of the page.
Click on the Jump to 1099-NEC link at the top of the search results.
Click Add a 1099-NEC.
Enter the information as shown on your form.
On the page titled Guess what? You can deduct expenses for the example work choose No, I don't have expenses related to this income.
Once back on the summary, click Add another 1099-NEC.