I think this entire thread as well as the answer are based on a falsehood - the question has a flaw which makes any answer to it flawed as well and that should have been noticed before advice was slung around. The citation contained in the question is not from IRS literature on the taxation of grants to the recipient, it's from IRS literature on whether the payment of the grant BY the foundation is subject to an excise tax. It's irrelevant to your situation. Your grant is like other scholarships and fellowships - it's probably not taxable if it's going to tuition and fees at a proper college. If you're getting six months to walk around with a red rubber glove on your head and journal about being a chicken or whatever it's taxable - that's why they gave you the 1099.
