The 1099-NEC was created to report nonemployee compensation. Nonemployee compensation is generally reported on Schedule C subject to employment tax.
If the income you earned was a "fellowship" and you were working for the pay, then it may need to be filed on Schedule C of your return.
The filing requirements for self-employment income require a Sch C to be filed if self-employment income of $400 or more are received during the year.
Beginning with tax year 2020, the IRS will require your self-employment income of $600 or more to be reported on Form 1099-NEC (non-employee compensation) instead of Form 1099-MISC.
If the terms are that it is payment for teaching, research, or other services required as a condition for receiving the scholarship, then it is probably taxable as pay for services provided.
Use Worksheet 1-1 from IRS Publication 970 to figure the amount of a scholarship or fellowship grant you can exclude from gross income.
Once you determine the taxable portion of your fellowship stipend, then the following article explains how to enter it in your return.
How to report a fellowship stipend
The IRS explains that if the following four conditions below are met, then the payments must be reported as non-employee compensation:
- The payment was made to someone who is not an employee
- The payment was for services in the course of trade or business (including government agencies and nonprofit organizations)
- The payment was made to an individual, partnership, estate, or maybe a corporation
- The payments to a person totaled $600 or more during the year
Also, a business may need to file a Form 1099-NEC if they withheld federal income tax under backup withholding rules even if the amount if less than $600.
