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May 1, 2021
Question

My summer undergraduate research stipend was reported via a 1099-MISC

  • May 1, 2021
  • 1 reply
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I received a research stipend from my college and received a 1099-MISC that reflected the amount of the stipend in box 3 "other income". I initially input the 1099-MISC in the regular income section and TurboTax counted it as self-employment and said I needed to upgrade to Deluxe. This can't be correct. What is the proper way to account for this payment? I am definitely NOT set-employed.

    1 reply

    Hal_Al
    Employee
    May 1, 2021

    Scholarships and stipends should not be reported on a 1099-Misc.

    The trick is entering it correctly in TurboTax, so it is not treated as self employment.
    Enter the 1099-Misc
    On the next screen Describe what the payment was for
    On the next screen select "none of these apply"
    On the next screen select "No it didn't involve work like my main job"
    On the next screen select "I got it in 2020" ONLY
    On the next screen select No, it didn't involve intent to earn money

     

    That will put it on line 8 of Schedule 1 , as other income.  Other income is unearned income.  If you are a dependent, on some one else's return.  That can be a problem. There's an alternate way to treat it as scholarship income, which is treated as  earned income for a dependent's standard deduction calculation. 

     

    The trick is entering it correctly in TurboTax, which apparently requires going through the Education deduction interview instead of the 1099-misc income interview. After entering your 1098-T, you'll be asked about scholarships not shown in box 5 of the 1098-T. Enter there. When asked if any of the scholarship was used for room and board, enter the 1099-Misc amount (in addition to any of your regular scholarship used for R&B). That makes it taxable.  There's a chance that the IRS may not match the 1099-Misc to the scholarship. income you report.