I'm receiving a National Science Foundation standard grant that I'm using for living expenses. Is this grant taxable? If so, what section do I account for it?

sean4 — Sat, 01 Jun 2019 07:44:02 GMT

Here is a link to the NSF standard grant that I'm receiving. https://www.nsf.gov/awardsearch/showAward?AWD_ID=1355678

Thank you for your question, and for providing the link t...

GeoffreyG — Sat, 01 Jun 2019 07:44:05 GMT

Thank you for your question, and for providing the link to your National Science Foundation SoLar Engineering Academic Program (SoLEAP).

Such a grant is definitely taxable (ordinary) income to you, the recipient; but it is not subject to the standard wage employment taxes (Social Security, Medicare) like ordinary W-2 income is, or would the case if this were treated instead as self-employment income.

Please allow us to explain.

Academic institutions, research facilities, and certain government agencies, especially at the graduate and postdoctoral levels, will often report taxable income in odd ways (or occasionally fail to provide any formal notice at all). Some will send a letter, a statement, or other such communication. In other instances they will place the tax reporting burden on the recipient, and simply ask them to "add up" (for themselves) the total fellowship, grant, or stipend checks that they received during the year.

It's certainly not an uncommon occurrence; but yes, grant income of the kind you received is still considered taxable compensation for your time and expertise. As such, you do (legally) need to declare it and report it on your income tax return. It does not matter if the money was used to pay for basic living expenses (or not). It is still considered taxable income, notwithstanding.

This income entry can be accomplished in the TurboTax program, both in the online (web-based) software as well as in the desktop versions of the program.

The mechanical steps to do so are outlined at the following AnswerXchange post from a few years ago:

https://ttlc.intuit.com/questions/2638576-how-to-report-a-fellowship-stipend

Those general processes remain accurate for the current (2016) tax year of the TurboTax program (i.e., either of those described will work just the same).

Both as a test of this, and as demonstrable proof for this answer, I ran a (hypothetical) grant of $3,000 through the federal tax program. In fact, I did it in both of the ways described on that other post, and the results came out just as expected, without any errors present. (Please see the attached screen-capture image for a visual aid; simply click to open.) As desired, the notation "SCH" appeared on Line 7 of Form 1040, and the $3,000 test amount was added to taxable wages.

I have full confidence that this method will work for your tax return, too. Just substitute the annual grant income total you have from your personal records for the $3,000 used in the demonstration example. The good news is that, while this income is taxable as ordinary income, at least you do not have to pay Social Security and Medicare taxes on it, as you would if the income were alternatively taxed as ordinary W-2 wages, or as self-employment.

Thank you for asking this important question, and good luck with your professional activities.

That was very thorough and descriptive without a single a...

sean4 — Sat, 01 Jun 2019 07:44:07 GMT

That was very thorough and descriptive without a single ambiguous statement. Thank you for that Geoffrey. You're doing great work!

topic I'm receiving a National Science Foundation standard grant that I'm using for living expenses. Is this grant taxable? If so, what section do I account for it? in Education

I'm receiving a National Science Foundation standard grant that I'm using for living expenses. Is this grant taxable? If so, what section do I account for it?

Thank you for your question, and for providing the link t...

That was very thorough and descriptive without a single a...