I got a $1000 scholarship and they sent me a 1099 NEC. After inputting this form I owe $142 in taxes. Is there a way to 0 this out? If so, what steps do I need to take?

[macuser_22]

That does not sound right.   The 1099-NEC is for self-employed income.

The 1099-NEC instructions specifically say:

https://www.irs.gov/pub/irs-pdf/i1099mec.pdf

Scholarships. Do not use Form 1099-NEC to report scholarship or fellowship grants. Scholarship or fellowship grants that are taxable to the recipient because they are paid for teaching, research, or other services as a condition for receiving the grant are considered wages and must be reported on Form W-2. Other taxable scholarship or fellowship payments (to a degree or nondegree candidate) do not have to be reported to the IRS on any form, unless section 6050S requires reporting of such amounts by an educational institution on Form 1098-T, Tuition Statement. See section 117(b)–(d) and Regulations section 1.6041-3(n) for more information.

You should contact the issuer for an explanation.

[dblasband]

Same here.  The school/issuer doesn't understand and may not fix it.  Then what?  How do I input the correction on the return?

[Irene2805]

You can enter the income reported on the 1099-NEC in TurboTax as "Less Common Income," which is reported on line 8 of 1040 Schedule 1 and will not generate Schedule C or SE tax.  Please use the following steps:

1. Miscellaneous Income, using these steps:
2. Click on Federal > Wages & Income   
3. In the Less Common Income section , click on the Start/Update box next to Miscellaneous Income, 1099-A, 1099-C. 
4. On the Let's Work on Any Miscellaneous Income screen, click the Start/Update box next to Other reportable income.
5. On the screen, Any Other Taxable Income? click the Yes box. 
6.  On the next screen, Other Taxable Income, enter a description and the amount.  Click Continue. 
7. The amount entered will appear on line 8 of Schedule 1 of the 1040.

@dblasband

[videot7]

I entered the scholarship money on the 1099NEC under "less common income" with a description that it was a Scholarship.

Do I also enter it on the "Did you receive a scholarship or Grant in 2021?" under "Other Scholarships/Grants/Fellowships"?

Thanks,

Videot7

[GeorgeM777]

No, you should only enter the amount one time.  Entering the amount in question on the page you reference could double the amount you received. 

To follow-up on the response from @Irene2805, when you are done entering the amount, check your Form 1040, line 8, which is the line for Other Income.  You should also see the amount on Schedule 1, line 8z; however, the amount on Schedule 1 is transferred to Form 1040.  Thus, just checking your Form 1040, line 8 should suffice.  If the amount on Form 1040, line 8 is correct, there is nothing more you need to do with regard to this income item.  

Assuming you are using TurboTax Online, follow these steps to preview your Form 1040 before you must pay.  

1. Open or continue your return.
2. Select Tax Tools in the left menu (if you don't see this, select the menu icon in the upper-left corner).
3. With the Tax Tools menu open;
4. Select Tools.
5. Next, select View Tax Summary in the pop-up.
6. Then Preview my 1040 in the left menu.

[videot7]

Thanks for the response!  It helps me a lot.