Education Grant and 1099 MISC

[DTG9000]

I have a 1099 MISC for 2019 from the college where I graduated from in 2019.  It is an award from them to attend graduate school in my field.

When I enter it into Quicken as a 1099-MISC, it also shows up as business income and expense (Schedule C) and asks me all types of questions on the nature of my "business", which I don't have, when it does a final check.   And it asks if I'm getting it because I expect to make money or not, and the help tab is not helpful.  I understand that 1099-misc figures have to show up on another form, but Schedule C??   Really ??

This is an unusual situation I know.  I guess I'm being shell-shocked by the fact that TurboTax is telling me I own about 25% of my award in taxes.   

[Hal_Al]

The IRS considers anything in box 7 of 1099-MISC to be self employment income. TurboTax (TT) aggressively steers you in that direction, even if the amount is in box 3. If you try reporting box 7 income as anything else, you chances of hearing from the IRS are very high.

That said, the key to getting TT to treat it as other income is to follow these steps:

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 2019" ONLY

On the next screen select No, it didn't involve intent to earn money

TT will put the amount on line 8  of Schedule 1 as other income

[DTG9000]

Thanks very much for the reply.

Disappointed that TT doesn't differentiate between box 3 and box 7 on the 1099-MISC, and its heavy-handed push to Schedule C regardless of which box is filled.  I didn't mention it before, but my fellowship was in box 3.    My Mom has a sole proprietorship and some of her clients give her a 1099-misc but their payments to her are in box 7. 

I'm  also disappointed in my old college for ignoring IRS pubs and reporting this fellowship on a 1099-misc at all.   From what I read on IRS docs, they didn't need to report this since it was non-compensatory money.    I got a letter and a contract from my old college with very specific conditions for receiving the money... I didn't need this tax form to complicate things.

While my situation is not common, it's not unheard of either.   TT has had decades to polish their software and I had assumed they had me covered.

I ended up reporting this as a separate fellowship further in the prep.

[Carl]

Disappointed that TT doesn't differentiate between box 3 and box 7 on the 1099-MISC,

Actually, it's the IRS that does not differentiate. Just enter the 1099-MISC data as instructed. Then when you get to the education section there will be a screen that will ask if any of your education assistance received was reported elsewhere on another tax document such as a 1099-MISC. Simply indicate that it was when when asked for the amount reported elsewhere, enter it. This way the program won't have you "double dipping" and counting the education assistance income twice.