My spouse received 1099NEC from University's Grant

[Jimmy1314]

My wife received $5000 federal grant from the University during 2024. We received 1099NEC for it instead of having the grant/scholarship on 1098T ($0 on 1098T).

I tried to search for an answer, but I am still not sure. I inputted the 1099NEC and chose "this is not money earned as employee or self-employed individual. After those steps, my tax return went from +1100 to +571. Does it seem right that we have to pay ~$600 in taxes for the federal grant?

Also, under education summary where I input 1098T and other educational expenses, there is a field for Scholarships/Grants. Do I need to put $5000 there too? When I put it there, it also decreases my tax return.

Just wanted to make sure I file this right and not decrease any tax returns.

[MinhT1]

The Federal grant is taxable, so it is normal that by entering the form 1099-NEC, your refund decreases. $600 of taxes for a grant of $5,000 means that you are in the 12% tax bracket.

You are correct in answering that this grant is not money earned as employee or self-employed individual. By doing this, you are not subject to self-employment tax.

As you have already reported the grant on form 1099-NEC, do not enter it again in form 1098-T. You would be counting this income twice.