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How do I report a grant reported on a 1099-MISC if I used it for post-graduate education expenses?

I received a grant from AmeriCorps for 1 year of service.  It was reported on a 1099-MISC.  I used the money to pay for post-graduate education at Harvard University. How should I report this so that it's not taxable?

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How do I report a grant reported on a 1099-MISC if I used it for post-graduate education expenses?

A Segal (AmeriCorps) award is taxable income but it is not subject to self-employment tax.  It should appear on Form 1040, Schedule 1, Line 21, as required by the IRS.  You will pay state and federal income tax on the amount.  Please enter it as shown in the instructions below.

Because the award is taxable income, any tuition, fees, books, and supplies paid with the amount is eligible for education credits.  If your Segal Award is reported on both the 1098-T and the 1099-MISC, enter the 1099-MISC as directed below, and your 1098-T as issued. 

If you did not receive a 1098-T, when completing your education section, indicate that you did NOT receive a 1098-T and you will be able to enter your expenses without the form. Enter your 1098-T exactly as you see it on the form. Your qualified education expense includes all amounts paid to the school whether through scholarships, grants, student loans, or your own funds. Only the amounts you actually paid (not the amounts billed) qualify for the credit.

If either box 1 or 2 does not reflect your total tuition expense, select What if this is not what I paid to this school? below box 2 to enter the correct amount.  Do not enter the taxable amount of the Segal Award.

To enter the 1099-MISC so that it does not prompt a Schedule C, take the following steps:

  • In your Federal return, choose the tab for Wages & Income
  • Tab through or scroll down to Other Common Income  (you may have to choose Add more income and then See more income to view this topic) and then Show More
  • Start/Revisit Form 1099-MISC
  • Edit the 1099-MISC if you already entered it, or Add it now and enter the information on the form, then Continue.
  • On the screen Describe the reason for this 1099-MISC enter your description.
  • On the screen Does one of these uncommon situations apply? choose None of these apply.
  • On the screen Did the [Description] involve work that's like [Name's] main job? answer No.
  • On the next screen, choose the year you received the money.  (In this case, 2018.)
  • On the screen Did the [Description] involve an intent to earn money? choose No and complete the interview.

This will place the 1099-MISC on Form 1040, Schedule 1, Line 21.

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