how do report a 1099-NEC for completing college classes?

Forum|Forum|1 year ago
March 27, 2025
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My local County Office of Education has a program where they give you a stipend for completing college classes towards an education degree. They also give a lump sum when you complete an associates or bachelors degree.
This money goes to me not to my college so they sent me a 1099-NEC.
I'm a full time student living at home (dependent) and seem to owe a lot of taxes on this both Federal and State.
I'm trying to work out if I've entered this correctly. I don't work for them. I submit an application, send in my grades and they send me a check.

Best answer by Vanessa A

Yes there is a Form 8615 when I did a brand new return asking about my parents income. So it sounds like I'm paying kiddie tax and not self employment tax.

Yes. If you have form 8615 you are paying kiddie tax.

Vanessa A

It sounds like you may be being taxed as self-employment income on this 1099-NEC. Since you did not work for them, when you enter the 1099-NEC, you will come to questions afterwards. Select this was received for Sporadic Activity or a hobby. This will change this income from self-employment income to Other Income which is how it should be reported.

Note, this is not a question on the tax form, it just tells TurboTax where to report it.

Having it treated as other income will not avoid the taxes altogether, however, it will avoid the 15.3% self-employment taxes.

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AussieRebeccaAuthor

I have picked sporadic activity or hobby. It's still taxing that income as self employment income on both Federal and California State. Is this because I'm being claimed as a dependent on my parents taxes or an error in TurboTax?