You are correct, this should not be reported in box 7 of a 1099-MISC. See the instructions for 1099-MISC: https://www.irs.gov/pub/irs-pdf/i1099msc.pdf (page 2). You may have already read this.
" 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."
If you can't get the payer to correct the 1099-Misc, I would still report the income as wages, but be prepared to provide verification of your status if the IRS questions you.
- Go to Federal Taxes> Wages and Income.
- Scroll to
the Less Common Income section and choose Miscellaneous
Income (the last choice).
- Choose Other
income not already reported on a Form W-2 or Form 1099.
- Answer
Yes on the Other Wages Received screen.
- Continue
past Wages Earned as a Household Employee and Sick or Disability Pay.
- Answer Yes on
the Any Other Earned Income screen.
- Choose Other on
the Enter Source of Other Earned Income screen.
-
Enter your fellowship information on the Any Other Earned Income screen.
This will report your
fellowship on line 7 of your Form 1040. You will not pay SE tax on this stipend.
[Edit 03/11/18 11:50 AM]
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