I’m doing taxes, so I can file Fin Aid forms.
My dependent child has a 1099 Misc for a summer REU – all boxes are zero except box 3.
Do you know if this goes on child’s return, as self employment or contractor?
Is there any other way/place to report it ( perhaps as a fellowship or educational activity) ?
Thank you!
If this is posted in the wrong place, I apologize.
From the instructions on the back of the 1099-MISC:
Box 3. Generally, report this amount on the “other income” line of Form 1040 (or Form 1040NR) and identify the payment.
There’s a bit more, which I won’t type but you should read.
Thank you @BelknapPoint. I am using H and R block software and it seemed to direct me to self- employment income.
Do you know if it matters if the REU income is listed as “other income” vs self -employment income?
The continued writing (on the back of the form ) directs me to Pub 525 and also says “If it is trade or business income, report this on Schedule C or F” So I’m still not sure. It seems to be taxable but not clear where to report.
It’s almost certainly taxable income. What’s REU? How, specifically, was the income earned?
@BelknapPoint Research Experience for Undergraduates Summer Program (Students do research, are mentored, have a few classes, seminars and are paid a stipend for 10 weeks in the summer.)
I was fooling around with the software program and it looks like you pay almost 2x more in taxes if you’re self-employed vs misc income-- thought I’m still not sure.
Well, if you’re self-employed, you need to pay self-employment tax (both halves of FICA), although you do get an above-the-line deduction for the employer half of that. Although it sounds like what your student did is not self-employment.
ETA: hopefully @Madison85 can offer an opinion.
@milkweed My child did a summer internship at her own college. She was paid a stipend and told by the college it was considered a non-qualified (taxable) scholarship.
SE tax can apply to Other Income items reported on Line 21, but doesn’t always, unlike Schedule C.
This REU 1099Misc Box 3 question comes up often. Here it is on Bogleheads:
If you think the income would subject to SE tax, then don’t put the income on Line 21.
Regardless…this 1099 misc goes on the student return, doesn’t it?
^Yes, it is student’s income.
Thanks everyone!