1099-NEC for high schooler

[TaxedParent]

My daughter is in high school and got a 1099-NEC for a summer internship stipend of $1500. 

I plan to claim her as a dependent but she will file her own taxes. 

I am using TTax Deluxe and entered her 1099-NEC under the 1099-MISC and Other common income section and selected the option that this is from a sporadic activity or hobby. 

Q1: Is that the right approach to enter this in TTax?

Q2: I was surprised that TTax calculated that she would owe both Federal and Wisconsin State tax on this stipend. Does that sound correct?

Thanks.  

[Opus 17]

1. Maybe.  Was the internship organized by her school and was it for credit?  In that case, it is education and should be reported as "other income."  However, if she was working at a company and not for school credit, then it should probably be reported as self-employment.  (There is a lot of gray area here.)

2. The standard deduction for dependents is different than for non-dependents, see publication 501.

https://www.irs.gov/publications/p501

This is mostly to prevent parents from putting their investments in the name of their children and then having all the income be tax-free.  If this is hobby or other income, then it is "unearned" income, and the standard deduction for unearned income is $1250, so a small portion of the $1500 will be taxable.

If you reported this as self-employment income, and she did not have other unearned income, then it would not be subject to income tax, but it would be subject to self-employment tax (about 15% of the $1500.)