Undergraduate summer research stipend

[hlandesberg]

My daughter is an undergraduate student and received a stipend for research completed last summer. She received a 1099-MISC with the stipend reported in Box 3. Please advise if this income is taxable and how it should be entered in TT. We started to put it in as 1099-MISC income, but encountered questions about a business that did not seem appropriate. 

Also - she worked from home due to the pandemic. We do not live in the same state as the university. If this income is taxable, will she need to file a return in the university's state (CT)  or just in our home state?

[ColeenD3]

Yes, the income is taxable, however, some states have minimum filing requirements. Check the nonresident state's Department of Revenue.

You must file a Connecticut income tax return if your gross income for the taxable year exceeds:

• $12,000 and you are married filing separately;
• $15,000 and you are filing single;
• $19,000 and you are filing head of household; or.
• $24,000 and you are married filing jointly or qualifying widow(er) with dependent child.

See this answer from IreneS2805 for instructions to enter the 1099 as other income.

Other Income

[hlandesberg]

Thanks for your input. This does not treat the research stipend as earned income. Given that my daughter did lab work for which she was paid this stipend, shouldn't the stipend be treated as earned income and therefore factored into the standard deduction calculation for her?

[JotikaT2]

No, it would not be considered earned income as typically it is issued to offset the costs of her education even though she has to perform certain tasks to earn the income.  

Taxable income for college

Page 5 - Publication 970