Can you please confirm that a stipend for an undergraduate summer internship/research at a university which is different from the one that the student attends during the school year, reported on form 1099-MISC box 3 for tax year 2022, is non-taxable? A stipend received from an institution where he is not a student is taxable income.
Taxable
"You must include in gross income:
- Amounts used for incidental expenses, such as room and board, travel, and optional equipment.
- Amounts received as payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant. "
If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:
- You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and
- The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.
So you are correct in entering the stipend as "Other income" , however, do not follow the rest of the instructions to remove it from taxable income. This income is subject to federal taxes and potentially state and local taxes depending on the state you live in.
To enter this income, you will take the following steps only:
- Federal
- Income and Expenses
- Scroll down to Less Common Income and click Show More
- Start next to Miscellaneous Income
- Start next to Other Reportable Income
This will put it on line 8z of your schedule 1 as other income.
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