The stipend reported on the 1099-NEC is categorized as self-employment income. This means it is considered nonemployee compensation and may be subject to self-employment tax. If the stipend is for services rendered, it should be reported as wage income. The IRS expects some stipends reported on 1099-NEC to be included in the "Wages, salaries, tips" line of your tax return.
TurboTax will help you categorize appropriately by following steps below.
- Open TurboTax and navigate to your tax return.
- Go to the search bar at the top right of the screen.
- Type "1099-NEC" in the search bar.
- Click the "Jump to" link that appears in the search results.
- Answer Yes on the Did you have any self-employment income or expenses? screen.
- If you land on the Your 2024 self-employed work summary page, select Review next to the work you're adding income for.
- Answer the questions on the following screens until you arrive at Let's enter the income for your work.
Entering Your 1099-NEC Details:
- Enter the details from your 1099-NEC form, including the total earnings reported.
- Categorize your income: TurboTax will guide you through categorizing your stipend income as self-employment income.
