What qualifies as "self-employed" in the eyes of the IRS?

Unless you did it on an ongoing basis, not.

It's not the software - never rely on software. It's the law, or the interpretation of it, which, with tax law, is full of gray areas.

A very occasional instance would not be considered self-employment. Recurring activity of the same nature generally is. Contrary to what many believe, all income reported on a 1099-MISC is not automatically considered self-employment, it can be reported as 'other income' on (for 2017) Line 21 of 1040. You may be contacted by the IRS for additional information and the decision is theirs, in the end.

I found one accounting site that says this:

'A man participated in a clinical drug study for which he was paid a lump sum. His intent was to receive treatment for asthma (Private Letter Ruling 9106004).'

This tells me that the claim was questioned by the IRS and the IRS made a ruling. It doesn't say what the ruling was, but I assume it was that this income was not self-employment income.

In your case, not only is this recurring - you've done it in consecutive years - you freely admit that you do it to earn income. I feel confident in saying that the IRS will not decide in your favor. Some people buy and sell things to earn money. You participate in medical studies to earn money. File a Schedule C-EZ. You may offset income with any legitimate expenses of producing that income. I can only see mileage but there might be something else. Since your net income on $1,200 gross will almost certainly be over $400, you will also have to file a Sch SE-EZ and pay the self-employment tax. You might be able to get away with not having to amend the previous year's return, but if you earn income this way for future years, you might want to do that and pay the SE tax you owe for the first year, or you run the risk of the IRS catching up with it at a later date, and the penalties then could be more than the tax.

P.S. Original poster here. To clarify, the hospital sends me a 1099-Misc each year. It's not a constant job; I sign up for any medical study that looks good.

If you get a 1099 form from the hospital then you could be considered as an independent contractor.

The 1099-MISC is not the key in self-employment. If you mow lawns during the summer and are not an employee of a landscaping business, that is self-employment. The home owners whose lawns you mowed will not give you a 1099. Every answer that used the 1099-MISC as the deciding factor is wrong. I do not know the answer, but Pascal and babyboomer are the only answers I would consider.

If you are not being paid by someone (you get a 1099 or a W-2), or are not claiming your home business as your sole income, you're not self employed.

In my state rummage sales and eBay sales are not self employment.

If you did not receive a 1099-MISC form then just claim the income on line 21.

The software is correct, that is self employment income. Would have been the same last year as well, you did something wrong. Put it this way - it's taxable income that you self employment and income taxes on, and it was last year too if you made over $400.

Did they give you a W-2 or a 1099 or are you under contract? From what you have stated, I couldn't tell you. It is not about how much you make or what you do.