Health Professionals Scholarship

[katherinebrysn17]

My husband receives the HPSP (Health Professionals Scholarship) to attend medical school. They pay for his medical school as well as a monthly stipend. His scholarship pay was received on a W2 and we are not sure how to file this. We have both the W2 for his HPSP scholarship as well as a 1098T from his medical school. The HPSP scholarship is tax-free but when we put it into our earning it show that not enough taxes were taken out even though taxes are not supposed to be taken out. 

Any help would be much appreciated since we had this same issue last year and it was never resolved during tax season 2021 and we would love to be able to do it correctly and know how to do it for the future. 

[MaryK4]

You would need to pay taxes on your stipend, so if you have not done so, submit a W-9 to the program or you can start making estimated payments quarterly directly to the IRS.  

You don't have to treat as payment for services the part of any scholarship or fellowship grant that represents payment for services if you receive the amount under the Armed Forces Health Professions Scholarship and Financial Assistance Program.