Apparently my kid’s summer internship work was not paid as wages. He received a 1099 MISC form, where the earnings (?) were reported in Box 3. I assume this is something like a stipend?
Is it earned income? If so, he doesn’t need to pay taxes. Total earned is about $2600.
But given that it’s reported on the 1099 MISC form, that would make it unearned, so he would need to pay taxes? No withholdings taken. I think the money was parceled out over 3 checks though, for 6 weeks of work, hence our confusion.
We would like to open a Roth IRA and deposit some of this earned (?) income. Still doable, if technically unearned income? I was reading about the SECURE act, which might address this?
Thanks to anyone who can point me in the right direction. We thought this process would be much simpler!