The above description for "if it's truly not self employment, there's third way" is out of date. It will still work, but is no longer the best place.
Enter scholarship. Enter stipend. Enter at Educational Expenses and Scholarships, under Deductions and credits (not at the 1099-MISC screen in the income section).
After answering no to having a 1098-T*, answer yes to qualifying for an exception (that gets you to the entry screens). You will have to go thru the whole education interview to get to the scholarship screen. At the scholarship screen, enter the amount of the grant. When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (usually all of it), in the pop up box. R&B are not "qualified educational expenses". So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B. This will put it on line 8r of Schedule 1 (this line was added in 2022).
*If you do have a 1098-T, one of the follow-up questions will be do you have any scholarships not shown on the 1098-T. Enter the additional scholarship/stipend there.
Q. Does he have to submit FICA or self employment taxes on a form with the tax return?
A. Usually not. See discussion above, in the older replies.
Q. He got a 1099-MISC with federal and state withholding in boxes 4 & 16. Does that change anything?
A. Yes, The 1098-Misc must be entered to get the withholding credited to you. After entering the stipend, as described above, in this reply, you need it enter it two more times.
Enter the 1099-Misc 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 2024" ONLY (even if you get/got it in other years, this is a necessary workaround for the no intent to earn money situation)
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. Call it something like "erroneous 1099 received"
