I eventually entered the intern stipends under the scholarship in the education section, as additional scholarship, and indicating the amount was not used for tuition and fee. By doing this, the amount showed up as “additional income” for scholarships on Schedule 1. And the standard deduction of $13850 applied instead of the $1100 for unearned income (don’t remember the exact number). If you put it under the “other income” in turbo tax will apply the deduction of $1100.
So basically I reported the income but didn’t do it as 1099NEC or schedule C. And I got the higher deduction as earned income for scholarships, but the remaining amount after deduction was tax at my rate (kiddie tax) as unearned income. I finally understand what the previous comment meant when they say”hybrid” of earned and unearned income for scholarships.
I will just try to explain to IRS if they question about the 1099 NEC form and self employment tax.
