Received a 1099 Misc for a Scholarship reinbursement and bonus incentive

[rhonda5838]

My daughter received a 1098-T for the year before and this year which I had no problem entering but she also received a 1099-Misc for her book reimbursement and bonus incentive for using them to fund her going to school.  The total amount is on line #3 of the 1099-Misc.  When entering the amount on line #3 it acts as if she made money for a business and this has nothing to do with making a profit for services etc.

Please help since it is asking for her to fill out a Schedule C as if she has a business.  This money was for attending College and for also reimbursing for her book costs that she paid out of pocket.

I would appreciate any help you may provide!

Rhonda

[Hal_Al · Accepted solution]

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. 

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 (Lying to TurboTax to get it to do what you want does not constitute lying to the IRS).

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

TT will put the amount on line 21 of form 1040 as other income