In 2024, I participated in a summer language program at a university overseas through my college in the U.S. My college provided a $3,000 travel stipend and I received a 1099-NEC. My actual travel expense was around $2,700. My parents paid for the language program tuition. However, I was able to receive credits towards my degree by testing out of a language class after returning to the U.S. I have also received a 1098-T for qualified tuition and related expenses (a separate amount, not including the amount on the 1099-NEC) from the college in the U.S. I have no earned income in 2024 but have a small amount of unearned income from a different source.
My parents claim me as their dependent and AOTC (without including the language program tuition) but I am puzzled about how to report the 1099-NEC on my tax return. Here are my questions:
1) How to determine if the travel stipend is scholarship or not? It was labeled as "travel stipend" on the statement I received from my college but I do have to apply to get it.
2) If I follow the steps to report it as scholarship and fellowship grants not reported on W2 (amount shown on schedule 1, line 8r), do I still need to enter the amount from 1098-T on my return, even though my parents have already entered the 1098-T on their return?
3) If the travel stipend is not considered a scholarship, does it automatically become taxable unearned income? I would then report it under the 1099-NEC section as “not money earned as an employee or self-employed individual” (amount shown on schedule 1, line 8z). I am being taxed at a substantial higher rate if I report it this way. Somehow my standard deduction was only $1,300 so it resulted in a much higher taxable income. I am questioning if I've entered everything correctly.
4) Am I subject to the kiddie tax regardless of which way I report it?
A step-by-step tip/instruction on how to enter into TurboTax will be very much appreciated.
