2023 Online Turbotax version recommended procedure for entering PhD fellowship stipend reported on 1099-misc

[J_34]

I am a first year PhD student and receive a fellowship stipend that covers everything. I elected to have withholdings taken from my monthly stipend and have now received a 1099-misc with my totals. I have reviewed past questions and comments from the last few years on the best way to enter this into Turbotax as to not be charged for self employment tax and also other taxes that my stipend should not be subjected to. One comment mentioned at one time a “fellowship” was an option to select in TT to achieve this.

My questions are, can someone confirm any changes that might have been made for this year concerning my situation. 

Also would going into less common income be the proper approach to list this income and under description list it as “Grad student Stipend 1099-misc”?

I also read somewhere “If you are not a candidate for a degree, then scholarship, fellowship, and grant income are taxable and should be reported here.” 

Would that indicate that since I am in a degree program, my stipend is not taxable?

Thanks for any input you can share!

[ShirlynW]

Congratulations on getting an award! IRS Pub 970, states a tuition reduction you receive for graduate education is qualified, and therefore tax free if both of the following requirements are met:

•   It is provided by an eligible educational institution. 
•  You are a graduate student who performs teaching or research activities for the educational institution. 

You must include in income any other tuition reductions for graduate education that you receive.

To enter your 1099-Misc

[Hal_Al]

The trick to entering it correctly in TurboTax, to get it treated as earned income but not subject to FICA or self employment is going through the Education expenses  interview instead of the 1099-Misc income interview.  Enter it as scholarship not shown on the 1098-T.  When asked how much was used for room and board, enter the amount that you have determined to be taxable.  New for 2022, it goes on line 8r of Schedule 1, rather than line 1 of form 1040.

Alternate entering, see: https://ttlc.intuit.com/community/college-education/discussion/re-how-to-report-1099-misc-received-f...

Excellent article on Stipendshttps://mint.intuit.com/blog/planning/what-is-a-stipend/

[J_34]

Upon further review... the 1099-misc lists withholding for fed and state.  Does this mean I will be forced to enter it as a regular 1099 so I can enter the withholding amounts, which will make it considered as self employment income?

[KrisD15]

You do need to pay income tax on the amount, but not Self-Employment. 

You have options on how to enter it. 

As a Scholarship/Grant/Fellowship in the Education Section as explained above

then

Enter the withholding under

Deductions & Credits

Estimates and Other Taxes Paid

Other Income Taxes

Other Income Taxes Paid in 2022

Withholding not already entered on a W-2 or 1099

This will put the income properly on Schedule 1 line 8r

OR

Enter it as a 1099-MISC 

Select My form has other info in boxes 1-18 to enter the withholding

Type Fellowship in the description box

Select "I was in a research study" and No to Did you perform a service" so it won't be flagged as Self-Employment 

This option puts it on schedule 1 and is taxed properly, but it will be on line 8z rather than 8r. 

@J_34