Where do I input an internship stipend?

[George4Tacks]

Assuming it is taxable, screen 14 > Alimony and Other Income > Other Income (Ctrl + E)  = next to last entry in that set of input. 

[renee6]

Thanks. I can't find any clear guidance on whether it would be subject to SE tax and input on the C instead.

[qbteachmt]

"I can't find any clear guidance on whether it would be subject to SE tax and input on the C instead."

It is Ongoing or one time? Was it a reward or for work performed? Was it from a school or learning institution or from an employer (and the person is misclassified)?

Have you looked through the IRS resources?

https://www.eitc.irs.gov/tax-preparer-toolkit/schedule-c-and-record-reconstruction-training/1099-mis...

[MarinaEA]

How did you handle this? I am dealing with the student who has 1099NEC with box 1 stipend. Cant figure out if it is subject to SE tax

[MarinaEA]

I am dealing with the same issue. A student was issued 1099NEC with box 1 checked. She said it was a stipend to cover housing, food, etc. But she also said it was in exchange for some services. She is a student but it did not come from her University, but a Zoo society. She had fellowship there. 

I cant figure out if this is subject to SE tax, thus a schedule C? Or not, just other income? If it is subject to SE, can we deduct housing, food 50% as business expenses, etc since it was out of town? 

[qbteachmt]

You can search the web, such as:

https://www.irs.gov/taxtopics/tc421

A scholarship is given to offset qualified education expenses. That is why it is not taxable. It does not include an offset of living expenses.

"Stipend" is often the word used because the provider either doesn't have to, or doesn't know they should have, put this person on Payroll as an employee. That would depend on State Labor regulations and the program that student was involved in.

Here is a nice explanation: "A scholarship/fellowship used for expenses other than qualified expenses is taxable income. Taxable scholarships are generally referred to as stipends and are payments for which no services are rendered or required. Examples of stipends are payments that can be used for living and incidental expenses such as room and board, travel, non-required books and personal computers, etc."

I found that here: https://taxdepartment.gwu.edu/taxation-scholarships-fellowships-stipends-0

If services are provided, that is regular taxable income

Housing and Food costs are not expense unless they fall under the business provisions. For instance, what do you mean by "50% food?" What do you mean by housing? What does "out of town" mean? Have you compared the taxpayer's scenario to the IRS business travel rules specific to 2021?

[MarinaEA]

Please read again my situation. Not in her case. Stipends payments are taxable except for the part used for tuition, fees, books, supplies and equipment required for enrollment and in the pursuit of a degree. In her case, it was to cover housing and food plus for services performed as I stated in my explanation, and she was issued 1099NEC box 1 which is only issued for non employee compensation. She was NOT issued a 1099MISC which should have been or a W-2 which she should have been, I believe. 1099NEC box 1 triggers a Schedule C especially in her case since it did NOT come from any educational institution and was not given to cover qualified tax exempt education expenses.

What I mean by 50% food? That's exactly what I mean. I am aware of rules when meals, hotels, etc can be deducted. If in her case, we have to file a Schedule C, and she was out of town 500 miles away for this assignment, then she qualifies to deduct 50 % food, hotel "housing", and all other business expenses. Just like a construction workers goes out of town to perform the job.

I have discussed this with a few very experienced tax professionals. We all are agreeing that she should have been issued a W-2 or 1099 MISC, but she was not. We all are agreeing that filing a Schedule C would have to be due to 1099NEC box 1, and due to that payment was not issued for qualified tax exempt education expenses. We do not feel good about it though as we still do not think she should be filing a Schedule C, however in this case, seems it would have to be done this way. 

[qbteachmt]

@MarinaEA 

"Please read again my situation."

Yes, this is why your own topic is where to follow up:

https://proconnect.intuit.com/community/proseries-tax-discussions/discussion/re-1099-nec-for-a-stipe...

This topic wasn't your exact issue, and now you are posting in two places, but the volunteers in one place cannot see updates in the other, unless we happened to know about it. Keeping all details in one place means everyone helping already knows what has been covered and gets the details directly.

Your issue of 1099-Misc or NEC is moot. The IRS spun off (well, resurrected) the NEC. It's just the old -Misc, Box 7. Nothing different changed for the requirements.

Let's continue on your own topic, and others might learn from your discussion there.