Athletic Scholarship Question

[Domenica91]

Hello,

I was a student athlete who had a full ride scholarship for 2019. It is time to file taxes because I got married in December of 2019 and I have to file jointly now.

1. Are the monthly stipends that student-athletes receives tax free?

I am asking because I received so much mixed information from both the financial aid of the university and the athletic advisor (who does not anything about taxes). My athletic advisor told me "if you do not work, you do not file taxes.." which I do not think it is right.

2. When scholarship money is named as "Athletic aid payments for cost of attendance", does that qualify as taxable or non-taxable?

[DavidS127]

If the stipend is considered compensation for services while you’re in school or for services you’ll provide in the future, it is taxable.  In other words, if you had to do work in exchange for the stipend, it is taxable.

If anything was reported on a W-2, it is taxable.

If your scholarship exceeded your "qualified education expenses" for tuition, fees, books, or required equipment and supplies, it is taxable.  Taxable scholarship amounts include scholarship money used to pay:

• Rent or board
• Utilities
• Other expenses not listed as required in your college program

See the TurboTax Help article about taxable scholarships at this link for more details.

[Hal_Al]

Stipends are usually included in the amount in box 5 of the student-athlete's form 1098-T.  Sometime they are reported on a form W-2, instead.  And, less frequently they are reported on a form 1099-misc.

I'm hearing that yours was not reported on any document.  It's still potentially taxable.

 "if you do not work, you do not file taxes.."  You are correct: that statement is not correct

Q.   When scholarship money is named as "Athletic aid payments for cost of attendance", does that qualify as taxable or non-taxable?

A. Athletic aid (and other scholarships) that pay for "cost of attendance" are not taxable. But room and board and other living expenses are not included in "cost of attendance", only tuition, fees, books and other course materials are.

So, assuming the stipends are not already reported on a W-2, 1099-Misc or the 1098-T, you enter it as taxable scholarship, in TurboTax (TT).  After entering the 1098-T, you will reach a screen asking if you had any scholarships not reported on the 1098-T.  Enter the total stipend amount there.