I am a Resident Alien (Green Card holder) and my foreign government will start generously supporting my college education this fall, studying at an approved by them US college. Their support has 4 elements:
A: Tuition and Fees, paid directly to my college.
B: Annual stipend for additional educational expenses (books, tools and equipment), paid directly to me.
C: Health Insurance coverage that extends to all this government's nationals who are sponsored in the US (and to their dependents).
D: Monthly stipend for living expenses, paid directly to me.
My government does not issue any US tax forms.
To get this support, I and my Dad are obliged to co-sign a contract promising that I would work for this government back home for at least 4 years post-graduation. If I fail to meet this obligation or fail to earn the college degree then we are both legally bound to repay them all expenses incurred.
Q1: Do these funds represent foreign earned income, a scholarship, a student loan, or a combination?
My best guess is they are part foreign earned income, part fringe benefits and part educational assistance by an employer.
Q2: If my guess is correct should I do the following with TurboTax?:
Report A and B under "Credits & Deductions" subheading "Education Expenses and Scholarships".
Omit C as tax deductible fringe benefit.
Report D under "Less Common Income" subheading "Foreign Earned Income".
