My understanding is that grant income is different from self-employment income.

Grant income is generally an allowance to allow you to pay your bills while you're engaged in a research project during your training. If you receive a 1099-Misc, the employer generally reports grant income in Box 3, Other Income, and not in Box 7, non-employee compensation. The benefit of receiving grant income is that it isn't subject to social security or self-employment taxes, which is quite a savings.

The downside is that you're not supposed to report that income on a Schedule C, should not deduct your professional expenses directly against that income, and aren't entitled to contribute to a retirement plan based on that income.

Zip Code: aschwartz@mdtaxes.com