25 year old worked all of 2016 for Student Conservation Association for stipend of $14,000. No 1099 or W-2 provided. Wages? Self-employmt income? Reportable at all?

[Twelveup]

College grad, not a dependent and this was her sole income.  Student Conservation Association has refused to provide any forms, though SCA says it's a stipend to cover expenses, but the job/internship was through the full year and full time.  How should this be reported and how taxable is it?

[GeoffreyG · Accepted solution]

To the extent that such a stipend, scholarship, grant, or fellowship was not used to pay for tuition and associated fees related to a degree program, then it is considered taxable income.

Thus, you do need to pay income taxes on your stipend income, given the circumstances you describe.  Please allow us to explain this, in detail.

Although you must pay ordinary income taxes on this income, however, you do not have to pay Social Security and Medicare taxes on it as well, as you would if this were instead true self-employment income, or regular W-2 wage income.

Academic institutions and programs, research facilities, and certain government agencies will often report income like yours in various or nonstandard ways, especially at the graduate and postdoctoral levels.  It's certainly not an uncommon occurrence; but yes, the income you receive is definitely considered taxable compensation.  As such, you do (legally) need to declare it and report the information on your income tax return.

This can be accomplished in the TurboTax program, both in the online (web-based) software as well as in the desktop versions of the program.

The mechanical steps to do so are outlined at the following AnswerXchange post from a few years ago.  Ignore any facts of how the income is shown or presented to you (Form 1099-MISC, a letter, memo, or no written guidance at all) and instead follow the steps outlined here:

https://ttlc.intuit.com/questions/2638576-how-to-report-a-fellowship-stipend

Those general processes remain accurate for the current (2016) tax year of the TurboTax program (i.e., either of those described will work just the same).

Both as a test of this, and as demonstrable proof for this answer, I ran a (hypothetical) stipend of $14,000 through the federal tax program.  In fact, I did it in both of the ways described on that other post, and the results came out just as expected, without any errors present.  (Please see the attached screen-capture images for a visual aid; simply click to open.)  As desired, the notation "SCH" appeared on Line 7 of Form 1040, and the $14,,000 test amount was added to taxable wages.

I have full confidence that this method will work for your tax return, too.  Just substitute the actual stipend income total you have for the $14,000 used in the demonstration example.  The good news is that, as we noted above, while your stipend is taxable as ordinary income, at least you do not have to pay Social Security and Medicare taxes on it, as you would if the income were alternatively taxed as ordinary W-2 wages, or as self-employment income.

Thank you for asking this important question, and good luck with your post-graduate activities.