Yes.
If this was not subject to her as a degree candidate, it would all be taxable.
If there was no tuition involve (and it sounds as if there wasn't) it would be taxable.
Grants to cover living expenses are taxable.
If you are not sure, click the link to read IRS PUB 970.
CLICK
HERE for IRS Pub 970 Tax Benefits for Education
If it was reported on a 1099-MISC, enter it that way.
The income is taxable to the student, so enter the income on the student's return.
With 1099-MISC:
Sign into your account and return. Click the “Pick up where
I left off” bar
Click on Federal
on the left side-bar, then Wages &
Income along the top.
When you get to the Income section, Scroll down to Other Common Income and Click
Show more
Click Start or Revisit for Form
1099-MISC
Enter a description
for the non-work income as “Fulbright Grant 1099-MISC” for the reason and Continue
Click “None of these apply.” at the bottom of
the list for “Does one of these uncommon situations apply? And Continue
Answer “No,
it didn’t involve work like my main job.” on the next screen and Continue.
Click the year you got the reward and Continue (if you received this income for more than 2 years, the IRS
will consider it as self-employment)
Answer “No, it didn’t involve an intent to earn
money.” on the next screen and continue.
Do you have another
1099-MISC? Click No and Continue
Click Done.
The income will show as a line item on line 21 of Schedule 1
of the 1040 and not as Self-employment.
With no 1099-MISC:
Sign into your account, your return, and click "Pick up
where I left off
Click Federal
Click Wages & Income
Get to All Income and scroll down to Less Common
Income and click Show more
Scroll down to Miscellaneous Income, 1099-A, 1099-C and
click Start
Scroll down to Other reportable income and
click Start
Type Scholarship into the
description box and enter the amount
Click Done
