No, this is not a mistake. Generally, stipends are considered taxable income at the federal and state level. However, the income will flow to your state return whether or not Box 7 is filled out on your 1099-NEC. It does not mean a mistake was made on one of your forms or that only one of your 1099-NEC's are taxable at the state level.
In addition, it is also important to answer all the questions that follow your input of your 1099-NEC forms. Since this is likely not self-employment income, you would enter your 1099-NEC and have it flow to Other Income, rather than a Schedule C (self-employment income).
Please follow the steps below to enter your 1099-NEC's:
- Open your return.
- Search for 1099-NEC with the magnifying glass tool at the top of the page.
- Click on the Jump to 1099-NEC link at the top of the search results.
- Click Add a 1099-NEC.
- Enter the information as shown on your form.
- On the page titled Guess what? You can deduct expenses for the example work choose No, I don't have expenses related to this income.
- Once back on the summary, click Add another 1099-NEC.
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