Any follow up on this issue? I have exactly the same issue this year. My am working towards a grad degree and got a $3000 scholarship from school, my tuition fee is above $10k. The school issued me a 1099-MISC, my education credits is almost wiped by this $3000 income. I read a few online posts and many believe that the school didn't follow 1099-MISC instruction and disreported scholarship s 1099-MISC,
“Scholarships. Do not use Form 1099-MISC to report scholarship or fellowship grants. Scholarship or fellowship grants that are taxable to the recipient because they are paid for teaching, research, or other services as a condition for receiving the grant are considered wages and must be reported on Form W-2. Other taxable scholarship or fellowship payments (to a degree or nondegree candidate) do not have to be reported by you to the IRS on any form.”
and suggest this:
If you receive a 1099-MISC that reports your fellowship income, you should report it as fellowship/scholarship income rather than as 1099-MISC “other” income.
This is to say ignore the 1099-MISC and reported it as scholarship in the education section, which is similar to Opus answer. IRS know what you are doing, and will accept that it's the school misreported 1099-MISC.
FYI:
<a rel="nofollow" target="_blank" href="
http://pfforphds.com/what-is-a-1099-misc/">http://pfforphds.com/what-is-a-1099-misc/</a>
Even these 2 links below this page has totally different opinions:
<a rel="nofollow" target="_blank" href="
https://ttlc.intuit.com/questions/3079277">https://ttlc.intuit.com/questions/3079277</a>
<a rel="nofollow" target="_blank" href="
https://ttlc.intuit.com/questions/4003621">https://ttlc.intuit.com/questions/4003621</a>
