Internship wages & expenses

[skb0407]

My son had an internship which was required for his degree.  He received a 1099-NEC.  We claimed him as a dependent.  I understand from previous posts here that his wages are considered taxable income but I'd like to clarify... Is this considered self-employment income?  Can he deduct expenses incurred while working at his internship?  If so, where do I input those expenses?

Thank you for your help!

[Bsch4477]

It is self employed income reported on Sch C along with any expenses related to that income. 

[Opus 17]

That depends.

If the internship is required for his degree, and if he got course credit for the internship, then it is not self-employment.  You can report the stipend in the education interview (as a stipend or grant in excess of tuition cost) or you can report it as miscellaneous other income, and it is not subject to self-employment tax.  (Education is not subject to social security tax, and an internship for college credit is education, even though he probably performed work-like tasks.)

If he did not get credit for the internship, then it is treated as though he were self-employed (gig worker, independent contractor, etc.) and reported on schedule C.  He would pay SE tax, but he could deduct ordinary and necessary employment expenses (if he had any); such expenses can't be deducted from the stipend if it is other income as a result of an educational requirement.