Q. I also already have a 1098-T so don't understand how it can be reported there?
A. It can be reported there because it is scholarship (stipend) that is in addition to the scholarship (if any) already reported on the 1098-T. More importantly, it's the only way to report the income so that it is classified as taxable scholarship (on line 8r of Schedule 1).
Instead of entering as other income, at the 1099-Misc screen, In TurboTax (TT), enter at:
Federal Taxes Tab (Personal for H&B version)
Deductions & Credits
-Scroll down to:
--Education
--Education Expenses
After entering your 1098-T (if you don't have a 1098-T, answer that you qualify for an exception). That will eventually get you to a screen to enter scholarships not shown on a 1098-T. When asked if the scholarship was used for room and board, answer yes, and enter the entire amount of the 1099-Misc. That will make it taxable.
This next steps are optional (and in addition to entering it as scholarship). There's a small chance the IRS computers will not match the 1099-misc to the Scholarship income. If you want to try to ward that off, do this:
Enter at the 1099-Misc screen
On the next screen Describe what the payment was for
On the next screen select "none of these apply"
On the next screen select "No it didn't involve work like my main job"
On the next screen select "I got it in 2022" ONLY
On the next screen select No, it didn't involve intent to earn money
TT will put the amount on line 8z of Schedule 1 as other income
Then enter a line 8z deduction, for the same amount. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Answer yes to Any other Taxable Income -On the next screen, Enter the number with a minus sign (-) in front. Briefly explain at description (1099-misc reported as Scholarship income)
