I am a PhD student who was awarded a national fellowship and got a 1099-NEC and 1099-MISC for same award

[jason805sm]

I'm a PhD student who received a fellowship from a national organization and my university reported on two different forms:

• 1099-NEC: $8,400
• 1099-MISC: $2,813.60
• Total: $11,214

The entire funds are for the same fellowship, which was contingent on me conducting research and covers my room and board. I understand this is taxable income.

In TurboTax, I've entered this in the Education (in Deductions and Credits) section as follows:

• On the scholarship/grant question, I selected "Yes" I received a fellowship
• Under "Other scholarships/grant/fellowships" box, I entered the total amount ($11,214)
• When asked if any scholarship wasn't for education expenses, I entered "Yes" and put $11,214
• When asked if I used it for room and board, I selected "Yes" and entered $11,214

However, TurboTax keeps looping me back to the same screens without letting me e-file (see image below). I also received a 1098-T and am going to school full time.

Should I instead be reporting these separately under the 1099-NEC and 1099-MISC categories? I'm concerned that might cause the system to treat them as different types of income (i.e., self employed) rather than as fellowship money. What's the correct way to report this fellowship income?

[Hal_Al · Accepted solution]

When asked if any scholarship wasn't for education expenses, try answering that no and don't enter any amount there. (I have desktop TT, and my interview is different).

Do enter the $11,214 has having been used for R&B (that's what makes it taxable).

The result you want is $11,214 on line 8r of Schedule 1. 

Here's my "standard answer" to how to  enter stipend income:

If you do have a 1098-T, one of the follow-up questions will be do you have any scholarships not shown on the 1098-T. Enter the additional scholarship/stipend there.  When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (usually all of it), in the pop up box. R&B are not "qualified educational  expenses".  So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.  This will put it on line 8r of Schedule 1 (this line was added in 2022).

Yes, entering at the 1099-Misc and (worse) the 1099-NEC treats the income differently and may subject you to self employment tax. 

Scholarships/stipends are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.

Taxable scholarship goes on line 8r of Schedule 1, from which TT treats it as hybrid income.