Stipend from University and SE tax

[Hawilson]

My daughter did a "Research Experience for Undergraduates" internship at Kansas State University last summer 2024. She received $6600.00 thru a stipend as per the university. They say they will not be sending her a w-2 or a 1099 or any sort. I believe she has to pay federal income tax on that money ( not used for qualified expenses) but not sure if she should pay SE tax. They did not withhold anything. If she doesn't have to pay SE tax, how would this be entered in turbo tax so no SE taxes would be taken out?

[KrisD15]

You can enter it as scholarship income on the student's return. 

You have to enter scholarship income under

Deductions & Credits 

Education 

Expenses and Scholarships (Form 1098-T)    START 

Enter the student, but skip all the entry screens for Form 1098-T until you get to the "Here's Your Education Summary" screen

Select "Scholarships/Grants (for all schools)    START

The income will be listed on Schedule 1 line 8r and flow to Form 1040 line 8

According to the IRS:

"However, for tax years beginning after 2019, certain non-tuition fellowship and stipend payments not reported to you on Form W-2 are treated as taxable compensation for IRA purposes. These include amounts paid to you to aid you in the pursuit of graduate or postdoctoral study and included in
your gross income under the rules discussed in this chapter. Taxable amounts not reported to you on Form W-2 are generally included in gross income as discussed later under Reporting Scholarships and Fellowship Grants."
 

[Hawilson]

Thanks very much. So, just to clarify, following these steps will result in her not have to pay SE taxes on that money, correct?

[SusanY1]

Correct, this will report the income on Line 8 of Form 1040 with a note that it is from scholarships.  It will not be subject to self-employment tax.