Tax Question--1099 MISC Box 3, Other Income, Summer Research Stipend

The IRS has updated form 8615 for tax year 2019 and made it available for use, so this is just TT being slow in updating their software.

I don’t know why the 1099-MISC earnings would trigger the kiddie tax, but if it’s taxable income the first tax bracket for either the regular single category or estates and trusts is at the 10% rate. For income that is subject to the kiddie tax, the first $1,100 is not taxed, the next $1,100 is taxed at the child’s normal tax rate, and only above $2,200 are the estates and trusts brackets and rates used (or if the taxpayer chooses, the highest marginal rate of the parent(s)).

If the amount reported on the 1099-MISC is a housing stipend and is supposed to be reported as a scholarship, that would be considered earned income for the purpose of determing the standard deduction, and everything would be covered under the standard deduction of $12,200.

If there is self-employment tax owed, half of that 15.3% will come back as an above-the-line-deduction.

Section 3121(b)(10) of the Internal Revenue Code (the “Code”) allows an exemption from U.S. social security (FICA) and Medicare tax on wages for services performed in the employ of a school, college, or university by “a student who is enrolled and regularly attending classes” at the institution.

https://corporate.findlaw.com/litigation-disputes/irs-issues-new-rules-on-student-fica-exemption.html