1099-NEC for Student Internship

[bluemax786]

Hello,

My son did a 10 week internship at a University and received a 1099-NEC for the stipend.

TT asks what type of Income is on your 1099-NEC ? and gives this 6 options

Self Employment income;

Farm;

Hobby;

Lawsuit settlement;

Medicaid payments;

Income that should be reported on a W-2;

If I select Self Employment, his taxes go up significantly as he owes Self employment tax.

If I don't any option, and proceed, TT does not include this stipend as Income anymore.

How to handle this situation since none of the 6 options matches correctly to his internship stipend earning ?

Thanks 

[DianeW777]

The stipend is not required to be reported as self employment income. Keep the 1099-NEC in the tax file for your son and delete that form from his return (see the link below.

• If you're using TurboTax Online software and need to delete a form, click here.
• If you're using TurboTax Desktop software and need to delete a form, click here.

Reporting: Taxable, non-W-2 stipends are usually reported on Form 1040, Schedule 1, Line 8r as "Scholarships and grants not reported on Form W-2".

• To enter  scholarships, grants, stipends (With or without a 1099 or a 1098-T):
  1. Click on the Deductions & Credits 
  2. Scroll down to Education (if Education is not there, click on Check for more tax breaks).
  3. Select Expenses and Scholarships (Form 1098-T).
  4. On the Do you want to enter your higher education expenses? screen, select Yes.
  5. Continue with the onscreen interview until you get to the Add any other financial aid screen.
  6. Enter the amount of the stipend in the box Other scholarships, grants, or fellowships
  7. This will be show on Schedule 1, line 8r, then carried with any other entries to the 1040.

@bluemax786