Bad news and more bad news.
The university is saying you are not an employee and do not qualify for tax free tuition remission. They are probably right.
The IRS considers anything in box 7 of 1099-MISC to be self employment income. In addition to income tax, you'll also have to pay self employment tax (social security & Medicare). They are probably taking the attitude that this is additional compensation related to your regular job and therefore subject to social security & Medicare (FICA) tax (employer reimbursement over $5250 is subject to FICA).
Enter at the 1099-Misc screen in Turbotax
