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NIH T32 Grant income that is meant to be estimated

Hello, my wife is compensated as a post-doctoral candidate through an NIH T32 grant.  We do NOT receive any document for this income, which is 56,750 for 2023.  No 1099, nothing.  The university website claims we should be estimating taxes to pay on this 56k.  However, we've already submitted our 2023 return, and we HAVE NOT paid any estimated tax for 2023.  We cannot, for the life of us, find where to input this money so that it is not taxed as 1099-MISC self-employment income.  I also would love any insights on how best to pay estimated tax on only a portion of income, the grant money, as opposed to our full income. 

 

Summary:

  • Where do you input taxable grant income on TurboTax so that it is not calculated as unearned income for self-employment tax?
  • What tax rate should be used to estimate taxes on grant income when it is just a part of overall marital income?
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1 Reply
Hal_Al
Level 15

NIH T32 Grant income that is meant to be estimated

Q. Where do you input taxable grant income on TurboTax so that it is not calculated as unearned income for self-employment tax?

A. Enter at Educational Expenses and Scholarships, under Deductions and credits (not the income section).

After answering no to having a 1098-T, answer yes to qualifying for an exception (that gets you to the entry screens). You will have to go thru the whole education interview to get to the scholarship screen. At the scholarship screen, enter the amount of the grant. When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (usually all of it), in the pop up box. R&B are not "qualified educational  expenses".  So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.  This will put it on line 8r of Schedule 1 (this line is new for 2022-3).

If you do have a 1098-T, one of the follow-up questions will be do you have any scholarships not shown on the 1098-T. Enter the additional scholarship/stipend there.  

Reference:

https://grants.nih.gov/grants/policy/nihgps/html5/section_11/11.2.10_supplementation_of_stipends__co...

 

Q. What tax rate should be used to estimate taxes on grant income when it is just a part of overall marital income?

A. Your marginal tax bracket. It's ordinary income. 

 

The following is mostly not relevant in your situation, since your spouse is not a dependent . It's being provided for others reading this. 

Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $13,850 filing requirement and the dependent standard deduction calculation (earned income + $400).  It is not earned income for the kiddie tax and other purposes (e.g. EIC).  For grad students and post grad fellows, scholarship, stipend and fellowship income is earned income ("compensation") for IRA contributions.

 

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