It depends. According to this IRS link, this is tax free if you meet the following conditions:
- You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and
- The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.
If used for any other purpose such as such as room and board, travel, and optional equipment, then these are taxable. Here is the best way to report these.
- Go to federal>income and expenses>all income>>show more
- Less Common Income> Start
- Miscellaneous Income,>start
- Other reportable income>start
- Next screen asks Any Other Taxable Income>yes
- The next screen will allow you to report the income with a brief explanation such as fellowship money received.
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