AMERICORPS EDUCATION GRANTS

[Motherrrland]

I earned money during my undergrad internships through Americorps totaling up to $2981. I let it stay there until I was done and needed to start paying my federal loans back. In 2025 I had them transfer the total to pay towards my federal student loans. I did not recieve any of the money and they would not allow me to use that on any foundation education loans that I owed. It was not self employment. I could not use it for anything else. How do I enter it? I shouldn't have to pay income taxes on it?

[MaryK4]

You will want to enter as Other Taxable Income.  The IRS does treat this as taxable income, even with the restriction that it must be used for educational loans.  See AmeriCorps Education Award.

If you want to enter the 1099-MISC, you will have to go through the questions carefully so TurboTax will report as Miscellaneous income and not create the Self-Employment forms.

You can also add as Other taxable income to avoid the steps and possible upgrade.

Under Less Common Income select Miscellaneous Income, 1099-A, 1099-C 

On the Let's Work on Any Miscellaneous Income, Start Other Reportable Income

On the Any other Taxable income? page, select Yes

On the next page, click on the Add button

Enter the information on the Other taxable income (I would use 1099-MISC with Payer's Name here as Description)