I'm not a tax expert. I have a family member who has the exact same question regarding the taxable stipend from NIH that is reported on Form 1099-G. From IRS tax topic # 421 (Scholarships, Fellowship Grants, and Other Grants), I infer that the payment is earned income as that tax topic says to report the income on the "Wages, salaries, tips" line of Form 1040. (https://www.irs.gov/taxtopics/tc421) TurboTax doesn't seem to accommodate this situation so it might make sense to enter the 1099-G information into TurboTax as a W-2.
