1099MISC Issued - exempt from SE?

[BulldogTom]

Student at university accepts a summer internship with SETI Institute (search for extra terrestrial intelligence) doing research projects.  Paid a flat $5000 for the summer session.  SETI issued a 1099MISC box 7. 

Obviously, student is not in the trade or business of searching for aliens.  Student is a student trying to pay tuition and get a resume item.  But I can't seem to find a specific piece of guidance that says an educational stipend for research is exempt from SE tax.

Any help would be appreciated.

Tom
Newark, CA

[Abby Normal]

This seems to imply that it is subject to SE and should have been on a W2.

[ILLMAS]

8 hours ago, BulldogTom said:

Student at university accepts a summer internship with SETI Institute (search for extra terrestrial intelligence) doing research projects.  Paid a flat $5000 for the summer session.  SETI issued a 1099MISC box 7. 

Obviously, student is not in the trade or business of searching for aliens.  Student is a student trying to pay tuition and get a resume item.  But I can't seem to find a specific piece of guidance that says an educational stipend for research is exempt from SE tax.

Any help would be appreciated.

Tom
Newark, CA

I don't know if you are being serious, but why did the student take the $5000 if their not in the business of looking for aliens?  

[Gail in Virginia]

I think that if the intern is employed by a non-profit, they can pay a nominal amount (20% or less of what someone in that position would normally be paid) and issued a 1099.  If a for-profit, then it should be on a W2.  Either way, it is subject to social security or self-employment tax, whichever applies.  At least, that is what I gathered from a quick Google search.

[DANRVAN]

The student is subject to FICA whether working as employee or contractor since obviously worked on a regular continual basis, despite the fact he was trying to earn tuition.

There are a few exceptions I am aware of including 4 year med student, that doesn't seem to be the case here. 

Also some exception for foreign students.

The only option is challenge the university with SS-8. 

[Jack from Ohio]

Subject to SE. Should have been reported in box 7 of the 1099-MISC.