<p>Just wondering if anyone has any experience with handling 1099's for scholarships received? I won a number of small scholarships last year from various organizations all of which were used to help pay my tuition. I received a 1099 from one of the organizations that awarded me a scholarship but nothing from the others. I am wondering if I should be reporting this 1099 on my tax return as other income even though it was used for tuition (not room and board). If I do I will have to pay quite a bit in taxes on it. Or should I contact the organization and ask them why it was issued? They put my scholarship under nonemployee compensation. Thanks for your help.</p>
<p>gracemat,</p>
<p>if the scholarship was used to pay QEE (tuition and books), than it is non-taxable.</p>
<p>Depending on your (and your parents particular situation, if you are dependent) you might want to report it as taxable income (going towards room and board). You might want to consult IRS publication 970 to make fully informed decision. </p>
<p><a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a></p>
<p>Thanks so much. Yes I was thinking it was non-taxable but was wondering why I received at 1099-misc showing it as nonemployee income. I guess as long as I can prove it was used to pay tuition that I do not have to report it on my taxes.</p>
<p>All scholarships are reported as income, outside on 1099s and institutional on 1098s. Scholarships may or may not be taxable, as described by lerkin, that’s why the forms are sent.</p>
<p>The 1099-MISC is an informational return and scholarships should NOT be reported on it. </p>
<p>I would contact the payer, tell them that they appear to have issued the 1099 in error and request that they reissue (correct) the 1099-MISC. If you don’t deal with it now you may have to latter when you get your friendly notice and a bill for the “unreported” self employment income.</p>
<p>It should not have been reported as “nonemployee compensation”. It should have been reported on a 1099-misc but as “other income”. If they won’t reissue it, file a schedule C showing the income and then subtracting it out as either “issued in error” or “qualified tuition”. Otherwise you’ll hear from the IRS</p>
<p>Thanks for your replies. I contacted the payer and they said the form was issued in error (should not have been sent) and they are correcting it. Thanks so much this saved me quite a bit!</p>