1099-MISC for Public School Transportation

[cazador4]

My children attend public school.  Due to a shortage of bus drivers in 2022, there were rolling bus route suspensions for most of the school year.  That meant each family had to provide transportation for their children to and from public school for one week of each month during the suspension.  I was reimbursed at the end of the school year a flat rate per month.  I received a 2022 1099-MISC form.  How would I report this on Turbotax?  It doesn't seem like it should be reported as job income as I was not working for the school.  Also, if this is to be reported as income, can I deduct the expenses I had (such as mileage, my time, etc.)  Thank you for any help or information you may have for me.

[CatinaT1]

This is considered a stipend, so you will report this under Other Common Income in TurboTax. Under this category, you will have the option to select 1099-Misc. I am assuming the income is reported to you in box 3 as other income. If so, this will be taxable income, but will not be taxed as self-employment income. You will not be able to deduct expenses since this is a stipend.

What is a stipend?

[edited 2.10.23 | 8:12am] @cazador4

[cazador4]

Thank you for this information.  I really appreciate your response.  When I click the "What is a stipend" link that you included it lists the description and information specific to a stipend.  There are a few descriptions regarding a stipend that don't seem to apply  to my situation.  Specifically it stating regarding a stipend that it is:

• Not dependent on services rendered

This was specifically dependent on me transporting my children to public school and then turning in the paperwork for reimbursement.  I was paid to transport them, but I also had expenses involved such as mileage.  Also, the flat rate amount reimbursed per month was dependent on if my child rode the bus 7 times or less during a four week cycle or more than 7 times during a four week cycle. 

I really appreciate any other information you or others may have regarding this.  Thank you!

[CatinaT1]

Can you tell me what state and school district you are in? During my research, I see this is happening all over the country.

You said you were paid a flat monthly fee, but what information did you have to submit for this? Did you have to submit your miles driven to and from school or anything specific?

Also, what box was the amount reported in on your 1099-misc? Did you have to fill out a W-9 for the school district?

[cazador4]

We received communication from the school updating us on the shortage of bus drivers and the rolling suspension that applied to every family in our public school district.  I have documentation from them showing what dates my children would not have transportation, as it was a rolling suspension.  Each family (depending on what route your child was on) would have one week of the month where the school would not provide transportation and it was the parent's responsibility.  If I wanted to be reimbursed,  I was required to fill out a transportation contract that listed my children's names, grades and schools and my name and address.

The transportation contract reads this way:

The parties agree as follows:

1.  The parent shall transport or provide transportation for the student(s) to and from school or bus stop on the days when school is in session.  The parent or guardian assures that a licensed or insured driver will transport the student.  This contract is valid only when transportation for the route has been suspended.

2.  The district will reimburse as follows: $50 reimbursement if the student rides the bus 7 or less times during a four week cycle.  $100 reimbursement if the student rides the bus more than 7 times during a four week cycle.  Note:  If the total reimbursement exceeds more than $600 in a calendar year, a 1099 form will be filed with the IRS as required by law.  A W-9 form (available on the Transportation website) must be completed and mailed to the school business office.

3.  The payment shall be computed on the basis of the process described above.  One payment will be made at the end of the school year on June 20, 2022.

I did have to fill out a W-9 and include it with the signed transportation contract.

The box on the 1099-MISC is box #3, "other income"

[KrisD15]

From your description, it should be reported as Other Income. 

If the school considered you an Independent Contractor, they should have used 1099-NEC in which case you would file as Self-Employed using Schedule C. 

As a Self-Employed Taxpayer, you would be able to deduct your expenses. 

You would also be subject to Self-Employment tax. (FICA)

You would need to take depreciation on your vehicle (either as depreciation or by using Standard Mileage which has a depreciation component) and then "Recapture" that depreciation as personal income when no longer using the vehicle for business. 

Additionally, the IRS could point out that you had no intention of starting a business and disallow the expenses.  

If you were an employee of the school, you might get the reimbursement tax-free (if reported under an accountable plan) but you are not a school employee. 

You can report the income on the 1099-MISC as "Other Income" without the intent to "make money" in which case it will be taxed (Income Tax) but not subject to Self-Employment tax.