Here are the answers to your questions.
1. Is the 1042‑S amount already included in Box 5 of the 1098‑T?
Usually yes — but not always. Most universities include all scholarships/fellowships paid through the student account in Box 5. However, stipend-type fellowship payments (paid through payroll or accounts payable) are often NOT included in Box 5. To know for sure, check:
- If the 1042‑S amount matches or is part of Box 5 → it’s included
- If Box 5 is much smaller than the 1042‑S amount → it’s separate stipend income
- Universities differ, so the safest approach is to compare the numbers.
2. How is this income treated?
As a Resident Alien, your fellowship is treated under the same rules as a U.S. citizen:
- Tax-Free: The portion used for "qualified education expenses" (tuition, required fees, books, and equipment required for courses).
- Taxable: The portion used for "non-qualified expenses" (room and board, travel, and general living stipends)
3. How to report this in TurboTax (the correct method)
TurboTax handles this cleanly if you follow the right path.
If the 1042‑S amount is included in Box 5 of the 1098‑T
You should:
- Enter the 1098‑T normally
- When TurboTax asks about additional scholarships or fellowship income not on the 1098‑T, enter $0
- TurboTax will calculate taxable scholarship automatically
If the 1042‑S amount is not included in Box 5
You should:
- Enter the 1098‑T normally
- When TurboTax asks: “Did you receive any scholarships or grants not reported on the 1098‑T?” → Enter the 1042‑S amount there
- TurboTax will treat it as taxable scholarship/fellowship income
- Do not enter this as other income
4. How to claim the federal tax withheld on the 1042‑S
- Go to Federal → Wages & Income
- Scroll to Miscellaneous Income
- Find “Other income taxes paid” or “Foreign tax withheld / 1042‑S withholding”
- Enter the federal tax withheld from the 1042‑S
TurboTax will treat it like any other federal withholding and apply it to your refund/balance due.
5. Do you need extra documentation because of the temporary nonresident withholding?
Generally no. The IRS sees this all the time with F‑1 students transitioning to resident status.
But you should keep these just in case if the IRS has questions.
- The 1042‑S
- Your residency determination (e.g., Substantial Presence Test result)
- Any university correspondence about Glacier issues
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