Is this activity a qualified trade or business under section 199A?

[sethandsarah]

I received a 1099 Misc for my school counseling internship paid for under the HB22-1220 Educator Stipend for the state of Colorado. Would this be a qualified business?

[MaryK4]

Probably not. Under IRC section 162, an activity qualifies as a trade or business if your primary purpose for engaging in the activity is for income or profit and you’re involved in the activity with continuity and regularity.  An internship is not intended to be continuous activity. 

[sethandsarah]

Thank you. That is helpful. One more questions. Did I "materially participate" in this business? My internship was about 300 hours and lasted 4 months of 2024.

[DianeW777]

No, a stipend is not considered a trade or business as indicated by @MaryK4.  For this reason the stipend is treated as Other Income. Report the income using the instructions below.

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section 
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount
5. For TurboTax Desktop > Income > Scroll to Less Common Income > .......

@sethandsarah