Stipends may be offered in lieu of or in addition to a salary. Interns, apprentices, fellows, and clergy are common recipients of stipends. Most stipends are considered taxable income, which means that recipients may be responsible for their own withholding taxes if they aren't deducted by the issuer. The amount put towards qualifying educational expenses isn't taxable and doesn’t need to be reported to the IRS, but the remaining amount does. For example, if $1,000 of a stipend goes toward tuition and books, and $2,000 goes toward room and board, only $2,000 is taxable. Stipends are awards and not wages for services, therefore, you don't have to pay self-employment taxes.
How to enter Stipends in TurboTax:
- Go to Federal Taxes> Wages and Income
- Scroll to the Less Common Income section and choose Miscellaneous Income (the last choice)
- Choose Other income not already reported on a Form W-2 or Form 1099
- Answer Yes on the Other Wages Received screen
- Continue past Wages Earned as a Household Employee and Sick or Disability Pay
- Answer Yes on the Any Other Earned Income screen
- Choose Other on the Enter Source of Other Earned Income screen
- Enter your stipend information on the Any Other Earned Income screen.
See additional information in the links below:
What is Stipend
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