TurboTax prompting me to file form SS-8 with IRS - what should I do?

This is actually a common misunderstanding with how TurboTax handles certain income types. The SS-8 form is used to determine worker classification (employee vs. independent contractor), which doesn't really apply to your situation since fellowship stipends have their own special tax treatment. For fellowship income received by students or researchers, you shouldn't need to file an SS-8. TurboTax is likely suggesting this because you entered the stipend under the 1099 miscellaneous income section, which often triggers their worker classification questions. The system thinks your husband might be misclassified as an independent contractor when he should be an employee. The better approach would be to report the fellowship stipend on the "Other Income" line (Line 8z on Form 1040) with the description "Fellowship" or "Scholarship." This more accurately reflects the nature of the income and should prevent TurboTax from prompting for the SS-8 form.

After spending hours fighting with my taxes last month, I found this amazing tool called taxr.ai (https://taxr.ai) that would be perfect for your situation. I had a similar issue with my wife's graduate assistant stipend and regular employment income. The taxr.ai system analyzed my tax documents and specifically flagged the fellowship income issue. It told me exactly how to report the stipend income correctly without filing unnecessary forms. The tool explained that fellowship stipends should be reported as "Other Income" with a description, just like the previous commenter mentioned, but it also highlighted which expenses could potentially offset that income. It saved me from going through the whole SS-8 process which would have been completely unnecessary and potentially delayed my refund by months.

I just wanted to follow up and say I tried taxr.ai after seeing it mentioned here and it was exactly what I needed! I had a similar situation with my postdoc fellowship and partial year of employment. The tool immediately identified that I was about to incorrectly file my fellowship income as 1099 work and showed me exactly how to enter it correctly in TurboTax. It even explained which parts of my fellowship might be tax-exempt if used for qualified expenses. The guidance was super clear with actual screenshots of where to click in TurboTax. Honestly saved me from making a mistake that might have caused headaches later. I'll definitely be using it again next year!

If you're still getting those annoying SS-8 prompts from TurboTax after trying the other suggestions, you might need to speak directly with an IRS agent to get clear guidance. I struggled with a similar issue last year and spent WEEKS trying to call the IRS without getting through. I eventually found this service called Claimyr (https://claimyr.com) that actually got me through to a real IRS agent in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that fellowship stipends don't require an SS-8 form and explained exactly how to report it correctly. The agent even gave me specific notes to keep with my tax records in case of questions later. Saved me from potentially filing unnecessary paperwork and delays in processing my return.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it myself since I needed to ask about my amended return from last year. To my shock, I got connected to an actual IRS agent in about 25 minutes. The system called me when the agent was on the line, so I didn't waste hours listening to that awful hold music. The agent was able to look up my amended return status and confirm it was still being processed. She even gave me a direct reference number for follow-up. For anyone dealing with complex tax situations like these fellowship/stipend issues, speaking directly to an IRS agent can save you from making filing mistakes. I'm still amazed this actually worked after weeks of failed attempts calling on my own.

Just wanted to add - I'm a university financial administrator who deals with international students and researchers frequently. The SS-8 form is definitely NOT what you need in this situation. That form is used to determine worker classification disputes (employee vs. independent contractor). For fellowship stipends received before H1B status, you should report it as Other Income on line 8z of Form 1040 with the description "Fellowship" or "Scholarship." No 1099-MISC or 1099-NEC reporting is needed, and certainly no SS-8. Also, remember that depending on your husband's country of origin, there might be tax treaty benefits that apply to fellowship income. Check if there's a tax treaty between his home country and the US that might make some or all of the fellowship income exempt from US taxation.

Has anyone here ever actually filed an SS-8? I'm curious because TurboTax prompted me to file one last year for some side gig work, but after reading about how long they take to process (6+ months!), I decided against it and just paid the self-employment tax instead.

I went through this exact situation last year with my wife's postdoc fellowship at a research university. TurboTax kept prompting us for the SS-8 form, but after doing some research and consulting with our university's international scholar services office, we learned it was completely unnecessary. The key issue is that fellowship stipends have a special tax classification that's different from both employee wages and independent contractor income. When you enter fellowship income under the 1099 miscellaneous section, TurboTax's algorithm incorrectly assumes there might be a worker classification issue that needs to be resolved with an SS-8. Here's what we did: we removed the fellowship income from the 1099 section entirely and reported it as "Other Income" on line 8z of Form 1040 with the description "Fellowship Stipend." This immediately stopped the SS-8 prompts. The fellowship income was still taxable for federal income tax purposes, but it wasn't subject to self-employment tax, which saved us quite a bit of money. One important note for your husband's H1B situation: make sure to keep detailed records showing the clear distinction between the fellowship period (January-August) and the W-2 employment period (September-December). The IRS likes to see clean documentation that explains the change in status and income type.