Fulbright Public Policy Fellowship Grant Help

[fulbrightgranthelp]

I received a Fulbright grant via the Public Policy Fellowship that should be considered wages. I do not know where exactly to income from this grant on the Turbo Tax form? Is this considered Miscellaneous, 1099? Will this be subject to FICA tax.

I will qualify for the FEIE so will not have income tax due on the grant, but I am not sure of FICA still applies to this award. Any guidance will be greatly appreciated. I also have looked over the IRS web page regarding Fulbright grants and it does not directly mention FICA but it does seem like it would apply.

[ee-ea]

If you were not a candidate for a degree, then the entire gross amount of the Fulbright grant is taxable and reportable as wages on the appropriate line of Form 1040 as a scholarship or fellowship.

https://www.irs.gov/individuals/international-taxpayers/fulbright-grants#:~:text=If%20you%20were%20n....

[fulbrightgranthelp]

Does that mean FICA applies?

[Critter-3]

https://ttlc.intuit.com/turbotax-support/en-us/help-article/import-export-data-files/enter-scholarsh...

[fulbrightgranthelp]

The Public Policy Fellowship is (I think) considered wages not scholarship income. So, this link does not apply. I am looking for someone who has actually filled their tax return or someone elses return with this fellowship specifically.

[fulbrightgranthelp]

Your response was quite helpful and do you know if FICA taxes will be applied to this?

[Opus 17]

Most of what was written does not apply.

A fellowship is taxable income, but it is NOT wages, is NOT earned income, and is NOT subject to FICA or self-employment taxes as long as you are enrolled in a recognized degree or post-graduate (post-doctoral) training program. 

However, a fellowship can be considered "compensation" for purposes of making contributions to an IRA.

To get Turbotax to recognize the fellowship as eligible for IRA contributions, it has to be entered via the education interview, not the 1099-MISC interview.  @Hal_Al  has the best info on this topic.

Was that your real question, or do you have other questions?

[Opus 17]

Further to my previous answer and your comments.

https://fulbrightscholars.org/visiting-scholars/guide/taxes

There is nothing on this page that indicates that a Fullbright scholarship is wages.  Wages are compensation for work performed, and even though you may have duties as a Fellow, anything you do that is part of education or training is not considered work performed.

Furthermore, since this is not earned income, it is not eligible for the foreign earned income exclusion, even if you performed your duties overseas.  If you are a US citizen or green card holder, you are required to report this income and pay taxes on it.  Fullbright indicates they pre-pay the taxes, but you must still file a tax return and report your income and whatever taxes were prepaid on your behalf, along with any other income you might have (investments, other scholarships, side jobs, etc.).  

[Hal_Al]

Q.  Where exactly to report income from this grant on the Turbo Tax form?

A. The income is taxable (but eligible for the Foreign Earned Income Exclusion [FEIE]. Where it goes depends  on why you got this income. If it's for your study or research, it's reported as scholarship income. If it's compensation for your services, it's reported as self employment income.

Q.  Is this considered Miscellaneous, 1099?

A.  Yes, if for services . Actually, more like 1099-NEC income.

Q. Will this be subject to FICA tax?

A.  Yes, if for services. Actually, subject to self employment tax (SET), reported on Schedule SE, which is how the self employed pay their FICA. 

Even if eligible for FEIE, the income is still subject to SET. 

[acep1111]

Right--but were within Intuit Turbotax is reported. I did not receive a 1099

[AmyC]

A scholarship can be reported various places depending on the reason. If you have a 1098-T and it goes with the college expenses including room and board, you can add it to the education section.

If this was research/ teaching type of income - you can enter it as other income not reported on a w2 or 1099.

Follow these steps:

1. Go to the federal income section
2. Scroll to the bottom
3. Miscellaneous Income, 1099-A, 1099-C, Start
4. Scroll to the bottom
5. Other reportable income, start
6. Select Other income not already reported on W2 or Form 1099, start
7. Other wages received, select yes, continue
8. Household, continue
9. Sick pay, continue
10. Medicaid, continue
11. Any other earned income? Select yes, continue
12. Select other
13. Enter description and amount, done

If this was income where you had to pay others for their work, you will need to subtract out the expenses. See another post of mine  here.

@acep1111