1099-MISC for a stipend payment - where do I put it?

[jaderenee1021]

What TurboTax software do I need to do this?

[Irene2805]

If you are reporting stipend income, in the Education section of Deductions & Credits, you can use any version of TurboTax (even the Free edition).

[Edited | 3/25/2021 1:23 pm PDT]

[Marka81]

So If you are performing any duties in conjunction with the stipend, can you deduct housing, food, etc as business expenses on a Schedule since the fellowship was out of town? 

[LeonardS]

No, you can not deduct housing, food, etc. as a business expense on a schedule.  A stipend is a fixed amount of money provided to people pursuing unpaid work to help offset expenses such as housing and food.

@Marka81

[Marka81]

Then how do you record it? It was issued on 1099NEC with box 1 which is "non employee compensation.' which should be followed by a Schedule C.  It was not issued as 1099 MISC other income or a W-2. And I know stipend payments are at least taxable in terms of PIT. 

@LeonardS 

[LenaH]

It depends. If you are performing any duties in conjunction with the stipend (e.g. teaching assistant, research assistant, student-teacher, clerical work, etc.), then the payment is considered self-employment income, which is reported on a Schedule C and subject to both income tax and self-employment taxes. If you are not performing any duties in conjunction with the stipend, it can be classified as Other Income. 

If you want to enter your 1099-NEC and have it flow to a Schedule C, please follow the instructions below:

1. Open your return.
2. Search for 1099-NEC with the magnifying glass tool at the top of the page.
3. Click on the Jump to 1099-NEC link at the top of the search results. 
4. Enter your 1099-NEC. 
5. Describe the reason for your 1099-NEC. 
6. Choose the option None of these apply to me on the page Does one of these uncommon situations apply?
7. The amount from your 1099-NEC will flow to Schedule C. 

If you want to enter your 1099-NEC and have it flow to Other Income (and not be classified as self-employed), please follow the instructions below:  

1. Open your return.
2. Search for 1099-NEC with the magnifying glass tool at the top of the page.
3. Click on the Jump to 1099-NEC link at the top of the search results. 
4. Enter your 1099-NEC. 
5. Describe the reason for your 1099-NEC. 
6. Choose the option This is not money earned as an employee or self-employed individual, it is from a sporadic activity or hobby (this is not common) on the page Does one of these uncommon situations apply?
7. The amount from your 1099-NEC will flow to Other Income. 

@Marka81

[jasonw882]

The negative number is coming up as line 8 on our 1040, not line 21. Is that correct?

[ColeenD3]

Yes, prior to TCJA, other income was entered on Line 21. It is now Line 8, 1040.

[ChicagoVeter]

The original post in this thread provides instructions for reporting a 1099-MISC for a stipend.

My son has received a stipend for summer internship/research at a university which is different from the one which he attends during the school year, reported on form 1099-MISC box 3.
I am filing a separate tax return for him and using the instructions provided in this thread to enter the amount such that it will be listed as "Other income" (and not self-employment).

At this point, TurboTax calculates a hefty amount of Federal & State taxes.  The instructions proceed to explain that I should make the entire amount non-taxable by entering it as a negative number in a separate box.

"Please be sure to write a short explanation and enter the amount as a negative number.   At this point, the form 1040 will show full amount as taxable AND as a negative adjustment on line 21"

Tax amount is reduced to zero, but I can't find any websites that could confirm the legality of this strategy.
Can you please confirm that a stipend for an undergraduate summer internship/research at a university which is different from the one that the student attends during the school year, reported on form 1099-MISC box 3 for tax year 2022, is non-taxable?

[Vanessa A]

Can you please confirm that a stipend for an undergraduate summer internship/research at a university which is different from the one that the student attends during the school year, reported on form 1099-MISC box 3 for tax year 2022, is non-taxable?  A stipend received from an institution where he is not a student is taxable income. 

Taxable

"You must include in gross income:

• Amounts used for incidental expenses, such as room and board, travel, and optional equipment.
• Amounts received as payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant. "

Tax-Free

If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:

• You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and
• The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.

So you are correct in entering the stipend as "Other income" , however, do not follow the rest of the instructions to remove it from taxable income.  This income is subject to federal taxes and potentially state and local taxes depending on the state you live in. 

To enter this income, you will take the following steps only:

• Federal
• Income and Expenses
• Scroll down to Less Common Income and click Show More
• Start next to Miscellaneous Income
• Start next to Other Reportable Income

This will put it on line 8z of your schedule 1 as other income. 

[ChicagoVeter]

Thank you for the detailed explanation!!!

Since a $4000 stipend for my son's undergraduate summer internship/research was at a different university from the one that he attends during the school year, and was reported on form 1099-MISC box 3, it gets hit with the kiddie tax, which for this particular case amounts to ~$500 federal tax + ~$200 state tax.

Yet, if the stipend income would be reported on a W2, the amount of tax would be zero.  It's unfortunate that the tax code doesn't have a provision to remedy this situation.

[jonsn]

Is this still correct for 2024?

[BrittanyS]

Can you clarify what form the stipend was reported on?  This will help us determine how it should be entered on your return.

[Hal_Al]

Q. Is this still correct for 2024?

A. It depends on which of the several replies, above, you are referring to. Even though you may have pressed reply at a specific post, your reply just goes to the bottom of the thread. 

More importantly, it depends on the details of your own situation. Stipends should not be reported on a 1099-Misc (but is sometimes erroneously done) and therefore should not end up on line 8z of Schedule 1 as other (unearned) income.

Stipends are treated like taxable scholarship and goes on line 8r of schedule 1 as earned income*.

For many people that may not make a difference. For some, particularly those that can be claimed as a dependent, it can be a big difference.

*Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $14,600 filing requirement (2024) and the dependent standard deduction calculation (earned income + $450).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.

[jonsn]

We received a 1098 for tuition showing tuition paid and the scholarship to cover tuition.  And we received an additional 1099 misc for the stipend used for living expenses while studying at college.  The 1099 Misc is what I am curious about.  How it's treated and where reported.  Turbo Tax wants me to put it in as 1099 Misc and then they make it self employment income which then is needing business information.  Child has $10,000 an earned income from working in the summer and $19,000 stipend on a 1099 Misc in addition to the 1098.  Thanks.