My son won a scholarship for a science project, I got check for $1000 but the money is managed by his school. I received 1099-MISC, how do I report taxes?

Forum|Forum|4 years ago
February 10, 2022
1 reply
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This is not my money, it is for a project and the school has an administrator to preside over it

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Best answer by Hal_Al

That's not a scholarship, that's a prize and it's usually taxable.

It's not clear cut that you are going to be able to escape being taxed on this. But, from the facts described, you do appear to only be the nominee recipient for the "school team". It's possible that the team members, rather than the school, are responsible for each reporting their share of the prize.

That said, If you received an erroneous 1099-Misc, you have several choices:

Ideally, you get a corrected 1099-misc from the payer
Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? 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 income correctly.
Report the income as misc line 8z, Schedule 1 income (enter in TurboTax at the 1099-Misc screen) . Then enter a line 8z deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description. Call it something like "nominee recipient adjustment"
Do nothing and hope you can explain it away when & if the IRS contacts you

Hal_Al

Employee

It's not clear how you "got a check" but the "money is managed by his school"? Was the same amount ($1000) included in box 5 of the school's 1098-T?

Scholarships should not be reported on a 1099-Misc So, you essentially got an erroneous 1099-Misc. Was the 1099-misc in your name and SS# or your son's?

salla001Author

@Hal_Al

Thank for your reply. My son and a couple of his classmates wrote a science proposal competition conducted by Blue Origin company and they won it. Blue Origin sent me a check for $1000 (on my name and SSN#) to build a prototype that my son proposed (at that time we did not whose details to give since my son and other kids did it on their own). After they won, since other kids are involved as well, the school counselor decided to take over it as a school project. I got a check in my name, but I sent it to the school for the administration to handle that money (I did not cash the money, the school did). Now that company sent me a 1099-Misc and I am not sure where to report it. I am a full-time student and I do not want to pay tax on money that I did not use for my personal expenses. Please advise.

Thank you.

Hal_AlAnswer

Employee

That's not a scholarship, that's a prize and it's usually taxable.

That said, If you received an erroneous 1099-Misc, you have several choices:

Ideally, you get a corrected 1099-misc from the payer
Don't report it on your return. Attach a copy of the 1099 and a statement explaining the circumstances. You can't e-file. From the IRS instructions for form 1099-Misc: Form 1099-MISC incorrect? 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 income correctly.
Report the income as misc line 8z, Schedule 1 income (enter in TurboTax at the 1099-Misc screen) . Then enter a line 8z deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description. Call it something like "nominee recipient adjustment"
Do nothing and hope you can explain it away when & if the IRS contacts you