Fellowships are considered reportable and taxable events if the amount received was for:
- Non-degree candidates, such as post docs
- Either past, present, or future
services by the recipient
- Room, board, travel, clerical help, equipment,
incidental living expenses and other expenses not required for enrollment
in or attendance at a University.
Because your son is considered a non-employee according to the letter, he can deduct any business related moving expenses including meals and transportation. In other words, he must be considered as self-employed and file a Form 1040 Schedule C. Otherwise, only qualified education expenses (e.g., books, tuition, school supplies) can be subtracted from his fellowship.
