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Krugs
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1099 NEC

I received a 1099 NEC from my university for participation in a summer scholars research program. I worked 40 hours a week for several weeks during the summer until the program ended. The university called it a stipend and there were no taxes or FICA taken out. One of the Turbo Tax questions when I select  that I have a 1099 NEC asks “Does one of these uncommon situations apply.” If I answer “This is not money earned as an employee or self employed individual, it is sporadic activity or a hobby” then I don’t have to pay FICA. If I answer “none of these apply to me” I have to fill out schedule C and do have to pay FICA. None of the schedule C questions seem relevant as I don’t own a business. Any advice on how to answer this question?  

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1 Reply

1099 NEC

There used to be question for "this money was earned as part of a fellowship."  (Was it removed, or did you miss it?)  Hobby would be an acceptable choice in this situation.  You owe income tax, but because this was part of your education provided through your own university, it is not considered "work", so it is not "income earned from working" and is not subject to self-employment tax.  Keep records documenting the fellowship because the IRS may send an automatic letter asking you to pay SE tax and you will want to have proof ready to include with your response.  

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