1099-NEC research stipend showing state tax

[eridani]

Hi all, I received a stipend (3k) for research I did in the summer of 2020.  I received 1099-NEC for this. 

It has 

Box 1: 3k (non employee compensation) 

Box 4 (federal tax withheld): 0

Box 5 (state tax withheld): 0

Box 7 (State income): 3k

I am confused why the 3k are reported in both Box 1 and Box 7

I have another 1099-NEC but it only reported Box 1. Not Box 7.

Is this a mistake, or should I pay both federal and state tax on this particular stipend?

Thank you for your help!

[LenaH]

No, this is not a mistake. Generally, stipends are considered taxable income at the federal and state level. However, the income will flow to your state return whether or not Box 7 is filled out on your 1099-NEC. It does not mean a mistake was made on one of your forms or that only one of your 1099-NEC's are taxable at the state level. 

In addition, it is also important to answer all the questions that follow your input of your 1099-NEC forms. Since this is likely not self-employment income, you would enter your 1099-NEC and have it flow to Other Income, rather than a Schedule C (self-employment income). 

Please follow the steps below to enter your 1099-NEC's: 

1. Open your return.
2. Search for 1099-NEC with the magnifying glass tool at the top of the page.
3. Click on the Jump to 1099-NEC link at the top of the search results. 
4. Click Add a 1099-NEC.
5. Enter the information as shown on your form. 
6. On the page titled Guess what? You can deduct expenses for the example work choose No, I don't have expenses related to this income. 
7. Once back on the summary, click Add another 1099-NEC.