<p>Hi Folks - I am hoping that molliebatmit might be able to chime in here ! :D </p>
<p>My son completed a 2013 NSF REU Summer internship; it is required by the Honors Program at USC (Columbia, SC).
His stipend was reported on a 1099-MISC in box 7, which designates him as an Independent Contractor where he has to pay self-employment taxes in addition to income tax.</p>
<p>I tried to have the 1099 changed to a W-2, requiring him to pay only income taxes but that backfired.</p>
<p>So here are the questions:</p>
<p>1) Do I file an SS-8 to contest his status as an independent contractor and just treat this income as 'unearned or regular income' and pay regular taxes ?</p>
<p>2) Do I ignore that this is in box 7 and treat it as if it was reported in box 3, because this stipend is not supposed to be taxable as it was required by his honors college?</p>
<p>3) Do I leave it in box 7 and treat him as an independent contractor, paying ALL of the required taxes ? I guess I could write off his meals and expenses ?</p>
<p>Note: He must file taxes because he worked in a lab while on campus, and made enough money to meet the minimum filing requirements. (with his scholarships, REU and the lab work - The work in the lab was reported on a W-2.)</p>
<p>Another Note: The REU summer internship was at UNC and they are just throwing up their hands, claiming the 1099-MISC box 7 is correct.</p>
<p>Confused;</p>
<p>EJXB</p>