This is a bit more complicated than previously stated. If the internship is provided by the school, for credit, then it is exempt from Social Security and Medicare, tax (or self-employment tax), even though it is reported on form 1099-NEC. This income would be entered as scholarship income in the education interview rather than as self-employment on the schedule C interview.
If the internship is provided by an outside company, but is for credit, and is a requirement of obtaining a degree, then I believe it is also exempt from self-employment tax.
If the internship is provided by an outside company for general education purposes, and is not a requirement for obtaining degree, then it is in fact, self-employment income.
