Question

1099 Misc for Stipend

Forum|Forum|6 years ago
March 8, 2020
1 reply
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My son received a 1099-MISC form for a stipend he received for participating in a summer fellows program through his university, which he has done the past two years and will do it one last time this summer. The intent of the stipend is to cover his living expenses while volunteering his time with an organization. When I answer the questions of whether or not he did this last year and will this next year, his tax amount owing increases and TT adds forms as if he is self-employed. I am a little confused because I wouldn't consider this as being self-employment and taxable, but I don't know how else to report the money. Is this taxable income? If not, how do I eliminate all the forms that are being loaded?

TurboTax Deluxe Online

GiseleD

Please see Tax Expert TomK's advice here, or read on:

There will be a few steps to follow to report your stipend correctly because of the form 1099-MISC. First, you would have to report 1099-MISC and make adjustments for the IRS matching purposes. Then, you would report the stipend correctly using steps below.

REPORT 1099-MISC

IF box 3 reports your stipend, report the form:

To enter/edit a 1099-MISC form:

Open (continue) your return if it's not already open.
In the Search box (top right-hand corner), type “1099-misc’
Click on the Magnifying Glass icon.
Click on “Jump to 1099-misc” link highlighted in Blue.
Answer the Step-by-step instructions.

And then make an adjustment using the steps below:

Federal taxes
Wages and Income
Scroll down to Less Common Income
Select Miscellaneous Income.
Select “Other reportable income”, click ‘Yes’ and you will be prompted to enter Description and amount. Please be sure to write a short explanation and enter the amount as a negative number. At this point, the form 1040 will show full amount as taxable AND as a negative adjustment on line 21. The end result: form is reported but not taxable.

If box 7 reports the stipend, you would have to report it as self-employed income, then enter the same amount as your "business" expense. This will ensure that form 1099-MISC is reported for matching purposes, but the amount is not taxable as self-employment income.

Go to:

1. Federal Taxes

2. Wages and Income

3. Self-Employment, Select Income and Expenses - follow the interview questions; you would report the stipend as if you own a business; once general questions are answered, you would enter the stipend as an expense (you can create your own description). The end result: form 1099-MISC is reported, but the income is not self-employment income--because it shouldn’t be.

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