How to Report Graduate Student Stipend in TurboTax

[josh941]

Hi All,

I've seen similar situations to this asked here but I haven't found any straightforward answers.  I'm a first year PhD student who got a Form 1099-MISC from my school reporting income from my non-compensatory stipend in box 3.  I also had set up both federal and state withholding and that is shown on the form.  Separate to my stipend, I also have full tuition and fee scholarships that were awarded by the school but they do not issue PhD students 1098-T's to show this.  How exactly am I supposed to report the fellowship income in TurboTax as well as the scholarships? From what I've seen so far it seems to keep treating information from the form when I enter it in as self-employment income as if I own a business, but this can't be the way I'm supposed to report this?

Thanks so much for any help!

[KathrynG3]

Report the income in Less Common Income. Regarding the scholarship, begin in the Deductions & Credits area under Education, in the same area as the 1098-T is reported. Answer No, that you did not receive it. Capture all your details here pertaining to the scholarship. Congratulations on your acceptance into the program!

For the 1099-MISC:

1. From the left menu, select Federal
2. Wages & Income scroll all the way down to Less Common Income and click Show More
3. Select the last listed option for Miscellaneous Income 1099-A, 1099-C, click Start
4. Next, select the last listed option Other Reportable Income
5. Did you receive any other taxable income, click Yes
6. Other Taxable Income: Enter your description and the amount and click Continue and Done. Disregard the comment "Do not enter income from Form 1099-MISC here" because this is meant to guide taxpayers reporting typical 1099-MISC income. Your case is less common and this is how you can report it in TurboTax. 

Please click the articles for more information:

Are my scholarships, fellowships or grants taxable?

2019 IRS Publication 970 beginning on page 5

and also, see page 89: Scholarships and fellowship grants.

• Expenses for tuition and fees required to enroll at or attend an eligible educational institution, and
• course-related expenses, such as
  • fees,
  • books,
  • supplies, and
  • equipment

that are required for the courses at the eligible educational institution. Course-related items must be required of all students in the course of instruction.

IRS Tax Benefits for Education Center

Student Exception to Social Security and Medicare Taxes and therefore is not subject to self-employment tax--report as less common income

[josh941]

Kathryn,

Thank you so much for the reply.  I am still having some issues with reporting my stipend income this way.  I only have an option to report the total income, but nowhere this way can I report the amount that I've already had withheld.  So it's treating this right now as if I haven't had any of the amount withheld already.  How can I do this in a way that correctly uses all the information on my 1099-MISC? Thanks.

[ls5171]

I'm having the same problem! I can't figure out how to report the amount that has already been withheld. Did you figure it out?

[DaveF1006]

Alright, follow my direction on exactly how to do this so that it is not reported as self-employed income so you don't have to pay those nasty self-employment taxes.

1. Federal>income and expenses
2. Other common income>Form 1099-MISC>start or revisit
3. Fill in your 1099 Misc information including the amount in box 3
4. Describe the reason for this 1099-MISC Give it a brief description
5. Does one of these uncommon situations apply? if it is part of a research study you can check that otherwise say none
6. Next it asks Did the fellowship involve work that's like XXX main job. You will probably say no.
7. then it asks How often did Brad get income for fellowship? You will answer this question according to your circumstance
8. Now this is important.  it asks if Did the fellowship involve an intent to earn money? if you say yes, then you will need to pay self-employment tax. If you didn't expect to benefit financially, then you will say no. Follow your heart.
9. If you paid federal income tax and if it is reported on the form, when you enter your 1099 MISC, there will be a check box that you will check indicating has other information in boxes 1-18.  You will enter the federal income tax withheld in Box 4 and the State income tax withheld in Box 16 along with the remainder of the state information  in Boxes 17-18.

Hope this helps !!

[ls5171]

Thanks, Dave. But when I enter the information, it doesn't ask me the question about intent to earn money. I answered the rest of the questions and it seems to still treat it as self employment.

I did find a way to enter taxes that were withheld after following the method described above:

Deductions and Credit > Estimates and other taxes paid > Other income taxes > withholding not already entered on a W-2 or 1099-MISC

[DaveF1006]

You might wish to delete the 1099 MISC you have entered and reenter the way I prescribed.  Also how did you answer the question Does one of these uncommon situations apply? Did you indicate it was from a research grant?

[ls5171]

I don't see the answer you're suggesting. The closest I see is "I was in a research study and this was the payment", but that doesn't seem accurate.

I've tried entering the way you described, but it still treats it as self employment income.

[AmyC]

For a 1099-MISC with income in box 3, follow these steps:

• Go to Income section
• Scroll down to Other Common Income
• Locate Income form 1099-MISC
• Start/Edit/Update
• Did you get a 1099?
• Yes
• Fill in the form
• Continue
• Then the program will ask you to Describe the reason for the 1099MISC, answer what the income is from.
• Continue
• Does one of these uncommon situations apply? None of these apply
• Continue
• Did it involve work that's like your main job? answer NO
• Continue
• How often did you get income for insurance? I got it in 2019
• Continue
• Did the xxxxxxx involve an intent to earn money? NO, it didn't involve intent
• Continue

@ls5171

[ls5171]

It works when I do that, but I'm hesitant to say that it doesn't involve work that's like my main job. Because in fact it is my main job. I also did intend to earn money.

[DaveF1006]

If this is the case, then it must be reported as Self-Employment Income even if you don't think of it as such. Normally if you have a job, a W2 is issued reporting your fair share of your social security and medicare taxes. Instead of issuing a W2, a 1099 MISC was issued because your employer did not wish to pay their portion of payroll taxes on your earnings. As a result, you are responsible for paying your own FICA taxes (social security and medicare) and to do this, you need to report this as self-employment income. 

By issuing a 1099 MISC, you became a contractor vs an employee.  One saving grace in this is that you can claim expenses against your 1099 MISC income to reduce the income tax and self-employment tax (FICA). I hope I provided clarification of this..

[Xinye]

Hi Dave,

I am writing a similar question about reporting Graduate Research Assistant (GRA) stipend in Turbotax.

In my case, I am an international student, as a Ph.D. candidate. I got a 1099-MISC from the university. In this form, ONLY box 3 shows the other income, and others remain $0.00 or blank. 

From your post: "Instead of issuing a W2, a 1099 MISC was issued because your employer did not wish to pay their portion of payroll taxes on your earnings. As a result, you are responsible for paying your own FICA taxes (social security and medicare) and to do this, you need to report this as self-employment income." I guess this is the reason why I have 1099-MISC instead of W-2. That is fair enough. But for filing tax, it is not convenient to report in TurboTax. 

I also saw some other answers shown as below (see the link):

https://ttlc.intuit.com/community/taxes/discussion/1099-misc-for-a-stipend-payment-where-do-i-put-it...

If I follow this way, the income is NOT treated as the Earned Income, which then leads to qualify for the EITC.

So I am thinking the way you described here is more reasonable for my case. Is it correct? 

Thanks!

But I am thinking the way you described here is much more 

[ThomasM125]

The main issue here is whether the income is for services that you rendered, or if it is a benefit offered by the college for which you simply need to attend class. Since the income is being reported in box 3 on the form 1099-M, the college appears to consider it more in the nature of scholarship income rather than compensation for services, for which it would be reported in box 7.

I looks to me to be closer to scholarship income than anything else, so I think the last response in the link you shared would be most appropriate:

[Xinye]

Hi Thomas,

If I follow the instruction "Report stipend income correctly", then I can see I have the federal tax due and state tax due, which means my income has been treated as the taxable income. Now I am wondering if this taxable income can be considered the Earned Income to qualify for the EITC? As this amount will be filled in line 7 of form 1040, which shows wages, salaries, tips, etc. Is my thinking is correct? But how to let TurboTax understand that? 

Thanks!

[ThomasM125]

The stipend income will be added to your wage income and will show on line 1 of your form 1040. I'm not sure if it will be considered earned income. However, there is nothing further you can do to report it on your tax return as earned income.