Stipend

[RLymanC]

Lots of students and teachers are paid what is called a stipend. these payments invariably show up on 1099-MISC box 7 "non-employee" compensation. As I understand it this income is not subject to SE tax. Can't really find and answer as to how this income is entered without the IRS looking for SE tax. Any suggestions.

[geekgirldany]

Here is some information on it:

"Grants given to students, trainees, or researchers which require the performance of personal services as a necessary condition for disbursing the grant do not qualify as scholarship or fellowship grants. Instead, they are compensation for personal services considered to be wages. It does not matter what term is used to describe the grant (for example, stipend, scholarship, fellowship, etc.)."

http://www.irs.gov/businesses/small/international/article/0,,id=106193,00.html

From what I have read it is taxable if services were provided.

[BOB W]

The question.....

..... is > is it subject to SE tax and how do you say No?

I still don't know the answer but making the entry on line 21, my program asks is it subject to SE tax > Y/N.

[Ken]

stipend

I have a teacher who recieves a stipend for attending a seminar or some such thing and its generally not much money. I just put it down as "other income".

[Ken]

stipend

I answer no when my computer asks about SE tax because its such a small amount of money. ( not over 400 dollars).

[Gene V]

I not sure about teachers, but if the student regularly attends classes and performs services as an employee of the shcool, they are exempt from FICA and FUTA
(IRC sec. 3121(b)(3)(B)
You can read this in last year TTB 5-20

[geekgirldany]

I guess it depends on the amount. I did some research on google and entered " stipend IRS". Lots of pages came up from universities stating it was taxable as wages. So it would taxed as SE. But I don't think I have seen a 1099 given for a stipend that had box 7 marked. It is usually the other income box.

[Ken]

self employment tax

You dont have to pay self employment tax unless its over 400 dollars.

In the case I have had with the teacher I do taxes for, her stipend is less than 400 dollars so I just put in on line 21 as other income. Been doing it for years, no problem.