Exemption from Social security tax

[jnd2546]

So apparently the "wages" of a college student, related to a "part time job" at their school of enrollment, is exempted from social security  ( and Medicare I presume) withholding from those wages.

However, if the school happens to issue a 1099-MISC ( other income) as compensation to a student for a specific research assignment, do you think that would fall into the same exemption category and avoid the self-employment SS and medicare tax?

Appreciate any insights.

Thanks

jnd2546

[qbteachmt]

Are you trying to describe "stipend" with all those quoted words?

[Just-Lisa-Now- · Accepted solution]

1099MISC Other Income isnt subject to SS/Mdcr. 

1099NEC for a self employed independent contractor would be.

[jnd2546]

Clearly the answer I was hoping for, but I ask myself what's the difference whether they issue Misc or NEC? An advertised requirement that the student applies for and gets the job to deliver a product. Sounds like NEC independent contractor; on the other hand if "W-2 wages" are exempted I guess that would be my answer to IRS on challenge and blame the school for not reporting on W-2.

Will go with your answer and not calculate SS/Medicare.

TY!

[qbteachmt]

"but I ask myself what's the difference whether they issue Misc or NEC?" That and W2, all have differences.

Without knowing what is "deliver a product" or which type of course or degree is involved (graduate studies? field placement?), one thing that makes the difference is when the person is under a departmental program vs hired by the institution directly. For instance, a Physical Sciences department will have a budget in the chemistry department for a lab assistant. That might be for teaching assistant, providing services, a specific program of study (such as a sponsored testing study) or it can be part of a work-study program. There are stipends, grants and fellowships.

Or, the person issuing the 1099-Misc doesn't know it changed from that form box 7 to a 1099-NEC, years ago.

Not enough information to really explain it more than this. The issuer can be contacted, you know.

[jnd2546]

Thank you so much for your time and those insights.

Student is underclass ( 2nd year at Penn); not sure of his major.  Will ask his dad. He just told me it was an advertised research project the school needed, he applied and was accepted;.

Will be speaking more with Dad this evening.

[qbteachmt]

"it was an advertised research project the school needed"

Seems likely to be a Fellowship. The 1040 Sched 1 doesn't really expect 1099-NEC, then.

Scholarship and Fellowship grants:

https://www.irs.gov/pub/irs-pdf/p970.pdf

https://www.irs.gov/pub/irs-pdf/p17.pdf

"Scholarships and fellowship grants are now reported on Schedule 1, line 8r."

https://www.irs.gov/pub/irs-pdf/i1040gi.pdf

Schedule 1, Line 8: "Line 8r
Scholarship and fellowship grants not reported on Form W-2. Enter the amount of scholarship and fellowship grants not reported on Form W-2. How-ever, if you were a degree candidate, include on line 8r only the amounts you used for expenses other than tuition and course-related expenses. For example, amounts used for room, board, and travel must be reported on line 8r."

[qbteachmt]

One more:

https://www.irs.gov/taxtopics/tc421

"If the taxable amount wasn't reported on Form W-2, enter it on Line 8 (attach Schedule 1)"

[jnd2546]

Thank you all!  Spoke with his Dad. He's a Psychology major ( underclass) and the research project was solicited by Cognitive Sciences Department.

Going with including the income Line 8 of sch 1 with no SE taxes.