Reporting a Prof Growth stipend my wife received

[Priller]

She (a teacher) received a $500 Professional Growth Stipend from a Non-Profit Organization.

I tried two methods:

Method 1:

a)  Federal Taxes > Wages and Income

Scrolled to the Less Common Income section and chose Miscellaneous Income (last choice.)

b) Chose Other Income not already reported on a W-2 Form or Form 1099

c) Answered YES on the Other Wages Received screen

d) Continued past Wages Earned as a Household Employee and Sick or Disability Pay

e) Answered YES on the Any Other Earned Income screen

f) Chose Other on the Enter Source of Other Earned Income screen

g) Enter her stipend info on the Any Other Earned Income Screen - "2020 Professional Growth Stipend" $500

However, the $500 stipend amount was added to Line 1 WAGES of the 1040 form.

Method 2:

a)  Federal Taxes > Wages and Income

Scrolled to the Less Common Income section and chose Miscellaneous Income (last choice.)

b) Chose Other Reportable Income

c) Entered a brief description and amount on the Other Taxable Income screen under my wife's name -"WIFE Professional Growth Stipend" $500

The $500 stipend amount was added to Line 8, "Other Income from Schedule 1, line 9", of the 1040 Form and also on Schedule 1, Part I, Additional Income, line 8 "Other Income. List type and amount:"

Which Method would be the correct one?

I'm so confused.

Thank you for all your help.

[ToddL99 · Accepted solution]

Either method is acceptable.  Both result in the same tax outcome - the stipend is taxed as ordinary income.

Method 2 would be my preference, since the stipend wasn't  technically "wages". "Other Reportable Income" is a more appropriate description, but the tax outcome would be same using either method.

[Priller]

ToddL99,

Thank you  😊

You're the best!

I'll use Method 2.