My daughter received a college scholarship for the 2023 school year from a local law firm. The law firm sent her a form 1099-NEC with the reported amount, which must be claimed on her state taxes, but is not federally taxed and therefore does not need to be reported on her federal return (I confirmed that with an IRS agent). My issue is that when I input the info from the 1099-NEC, it automatically applies the “income” to both her state AND federal taxes. How can I input the 1099-NEC info and have it apply to her state taxes only?
