Please read again my situation. Not in her case. Stipends payments are taxable except for the part used for tuition, fees, books, supplies and equipment required for enrollment and in the pursuit of a degree. In her case, it was to cover housing and food plus for services performed as I stated in my explanation, and she was issued 1099NEC box 1 which is only issued for non employee compensation. She was NOT issued a 1099MISC which should have been or a W-2 which she should have been, I believe. 1099NEC box 1 triggers a Schedule C especially in her case since it did NOT come from any educational institution and was not given to cover qualified tax exempt education expenses.

What I mean by 50% food? That's exactly what I mean. I am aware of rules when meals, hotels, etc can be deducted. If in her case, we have to file a Schedule C, and she was out of town 500 miles away for this assignment, then she qualifies to deduct 50 % food, hotel "housing", and all other business expenses. Just like a construction workers goes out of town to perform the job.

I have discussed this with a few very experienced tax professionals. We all are agreeing that she should have been issued a W-2 or 1099 MISC, but she was not. We all are agreeing that filing a Schedule C would have to be due to 1099NEC box 1, and due to that payment was not issued for qualified tax exempt education expenses. We do not feel good about it though as we still do not think she should be filing a Schedule C, however in this case, seems it would have to be done this way.