Thank you for your question, and for providing the link to your National Science Foundation SoLar Engineering Academic Program (SoLEAP).
Such a grant is definitely taxable (ordinary) income to you, the recipient; but it is not subject to the standard wage employment taxes (Social Security, Medicare) like ordinary W-2 income is, or would the case if this were treated instead as self-employment income.
Please allow us to explain.
Academic institutions, research facilities, and certain government
agencies, especially at the
graduate and postdoctoral levels, will often report taxable income in
odd ways (or occasionally fail to provide any formal notice at all). Some will send a letter, a
statement, or other such communication. In other instances they will
place the tax reporting burden on the recipient, and simply ask them to
"add up" (for themselves) the total fellowship, grant, or stipend checks that
they received during the year.
It's certainly not an
uncommon occurrence; but yes, grant
income of the kind you received is still
considered taxable compensation for your time and expertise. As such, you do (legally) need to
declare it and report it on your income tax return. It does not matter if the money was used to pay for basic living expenses (or not). It is still considered taxable income, notwithstanding.
This income entry can be accomplished in the TurboTax
program, both in the online (web-based) software as well as in the
desktop versions of the program.
The mechanical steps to do so are outlined at the following AnswerXchange post from a few years ago:
https://ttlc.intuit.com/questions/2638576-how-to-report-a-fellowship-stipendThose general processes remain accurate for the current (2016) tax year of the TurboTax program (
i.e., either of those described will work just the same).
Both
as a test of
this, and as demonstrable proof for this answer, I ran a (hypothetical) grant of $3,000 through the federal tax program. In fact, I did it
in both of the ways described on that other post, and the
results came out just as expected, without any errors present. (Please
see the attached screen-capture image for a visual aid; simply click to
open.) As desired, the notation "SCH" appeared on Line 7 of Form 1040,
and the $3,000 test amount was added to taxable wages.
I have
full confidence that this method will work for your tax return, too.
Just substitute the annual grant income total you have from your personal records for the
$3,000 used in the
demonstration example. The good news is that, while this income is
taxable as ordinary income, at least you do not have to pay Social Security and
Medicare taxes on it, as you would if the income were alternatively
taxed as ordinary W-2 wages, or as self-employment.
Thank you for asking this important question, and good luck with your professional activities.
