@taxdrama wrote:
The paid internship was with NIH, which issued a 1099-G for about $18K and showed it as Taxable Grants. Sharing to see if this is the reason I am being forced by TT to work on Form 8615, Tax for Certain Children Who Have Unearned Income. My other unearned income is about $150 in bank interest and $19 in dividends. I am also a self-employed tutor from where I earned about $5K in 2025.
Yes, this can be a problem. When a child is under age 24 (and meets certain other conditions) and has certain income, it can be taxed at a higher rate. This is meant to capture parents who put investments in a child's name, but it can also affect an adult child who gets certain types of income.
A 1099-G is not the right kind of tax statement for this income, it probably should have been on a 1099-NEC. Whether or not it would be reported as self-employment income or an educational stipend depends on whether this was part of a degree program or something you did after, and I would have to do more research on that. (Sometimes, companies "hire" people and falsely call them interns. For a real internship, it must be educational to the intern and the intern can't be a substitute for an employee--can't do the same duties as an employee, for example.). A don't think there is a problem classifying an NIH internship as educational. But the problem is that it is still "unearned income" which triggers the higher tax rate.
I need to ask another expert for help on this,
@DoninGA
@Hal_Al
