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Reporting of a "non-qualified" scholarship payment
April 5, 2023
Q. If we as an organization are not set up to provide a tax-free scholarship directly to an individual and cannot track how the funds are spent do we have to report it on a 1099? If yes, what box does it go in? The scholarship is not for services. It was awarded directly to the individual who is a U.S. person.
A.
(Answered by IOFM's third-party tax experts)
The scholarship is categorized as a "non-qualified" scholarship because it was not limited to being used only for tuition and related…
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