My child got a small stipend (grant?) from her college to enable her to do an unpaid summer internship. It's through a program funded by the school so that their students can do afford to do unpaid internships who otherwise would need the income from a paid summer job. There were requirements around the types of internships she was allowed to do, she had to get approval first and give a presentation write a paper on her experience afterwards.
She also has a small amount (few hundred $) of W2 income from the school. She does get grants from the school for tuition, too, but is not doing work study or anything, this extra income is just regular W2 income related to any financial aid. No federal taxes were withheld from that (SS and Medicare were).
Her total income from both sources was less than 1/3 of the current filing requirement. She is claimed as a dependent on my taxes. I'm helping her do her own taxes.
The school provided a W2 for the other work, but what they say about the internship money is that "it should be reported to the IRS as income, but we are not obligated to nor will we provide any documentation or tax advice".
I cannot find anywhere in TurboTax to put this, other than as self-employment income with no documentation which triggers self-employment tax and requires upgrading to a paid version of TurboTax. This doesn't feel like "self-employment" income to me.
I can understand the self-employment tax I guess, as nothing was withheld from this stipend at all, but it seems ridiculous that someone earning this small an amount of money should have to switch to the paid products because of this. Am I doing something wrong here? Is this supposed to be reported somewhere else that wouldn't trigger the need to upgrade (and preferably not self-employment tax either)? Is the school's vague statement hinting that this doesn't actually have to be reported?
If it truly is self-employment income then she has to file, but if not since she's well under the filing requirement should she just not file at all this year and avoid this issue altogether?
