Q. When I enter the 1099 form details, it routes me to report this as self employment. Is this correct?
A. Possibly, but probably not.
Are you an employee of the university? Who issued the 1099-Misc, the school or your employer. What did they say when you asked them why they sent you a 1099-Misc.
True "tuition reduction" for university employees is usually ignored for tax purposes. No tax form is issued.
From Pub 970:
"You don't have to include a qualified tuition reduction in your income. A tuition reduction is qualified only if you receive it from, and use it at, an eligible educational institution.
The rules for determining if a tuition reduction is qualified, and therefore tax free, are different if the education provided is below the graduate level or is graduate education. 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"
