How to report a fellowship stipend?

A scholarship or fellowship grant is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution. Any amount of scholarship or fellowship that is greater than your education expenses is taxable.

If you have offsetting education expenses enter the scholarship or grant  as part of your education expenses.

Select Federal Taxes
Select Deductions and Credits
Select Show More at Education
Select Start or Update at Expenses and Scholarships (Form 1098T)
Select Edit at Scholarships/Grants (for all schools

If you do are not a candidate for a degree, or if you do not have offsetting education expenses, the fellowship should be reported as less common income.

• Select Federal Taxes
• Select Wages and Income
• Scroll down to Less Common Income and select Start or Review
• Select Start next to Miscellaneous Income 1099A, 1099C and enter the information provided on your form

See IRS Publication 970 for additional information.

https://www.irs.gov/publications/p970/ch01.html

Thank you for your help! That was really useful. I ended up filing form 1040A via TurboTax. I also found an option in TurboTax to report my stipend that I receive as a foreign income.  I had to enter a random SSN to continue the process in TurboTax. Then I scratched it off after printing the forms. I also filled form W-7 to apply for ITIN because I don't have SSN. I put them both (1040A & W-7) in one envelop and they are ready to be dropped off at the mailbox. I hope I did it the right way. Thanks again!

Hello, I actually received a form 1099-MISC for my fellowship. I am also a postdoc, so it is taxable income. Where should I input it? Thanks

FOR THE ONLINE PROGRAMS:

Sign into your account and start the return (Pick up where I left off)

Click Federal on the left side-bar

Click Wages & Income along the top

(Click  “I’ll pick what I want to work on” and click  “Add Income” and “See list of all income” if needed)

Under Income scroll to the bottom and click Show more under “Less Common Income”

Scroll to the bottom “Miscellaneous Income, 1099-A, 1099-C" and click Start

Scroll to the last choice and click Start next to “Other reportable income”

(this screen says “Do not enter income reported on Form 1099-MISC. Please disregard this warning for the Americorp 1099-MISC)

Enter Americorps 1099-MISC as the description and the amount and Continue

Click Done on the next page

The online program puts the amount on line 21 with the description of “Americorps 1099-MISC".

It will not be treated as self-employment.

FOR DESKTOP:

see screenshots below

When you get to the Income section, SCROLL PAST Miscellaneous 1099-MISC and Other Income to Miscellaneous Income 1099-A, 1099-C located at the bottom of the list.

Click Start and again go to the bottom of the list to "Other reportable income" and click Start

Continue from there. See screenshots for assistance.

The income will show as a line item on line 1 of the 1040 and not as Self-employment.

This year, turbo tax has 2 places where you could input your husband's fellowship income.  I think you can choose to enter the fellowship income in either one place or the other.  

One option is that you would have to go through the education section (under credits and deductions). In the end you can enter your taxable fellowship.

The other alternative is to "Visit All" the "Less Common Income" topics.  If you visit all these topics, one type of less common income they'll ask for is "Taxable Scholarships and Fellowships."  There it says :  "If you are not a candidate for a degree, then scholarship, fellowship, and grant income are taxable and should be reported here.  Enter the amount of taxable scholarship, fellowship, and grant income you received."

It will be added to line 7 on form 1040 (and SCH <amount> will be written next to it).

That worked!

I see that taxable scholarships and fellowships comes up as a choice in other income.

Same here.

Thank you!

I'm not seeing this option this year. Has anyone found it?

I did a test and it does seem more complicated than last year, but still basically the same. Since you do not have a 1098-T, you still need to add yourself as a student and enter all the other information as if you are about to enter a 1098-T, but you'll say you don't have one and that you don't have an exception. 

Then you continue. 

A screen will ask if you have a scholarship, fellowship or grant to declare, you say yes. Enter the amount, answer more questions and it is listed as "Scholarship" on line 1. 

"Be sure to enter it separately, in the Education section, but not on the 1098-T screen.

Click Federal on the left side-bar

Click Deduction & Credits along the top

Scroll down to the Education Section (Click “Show All" if needed)

Click Start or Revisit next to “Expenses and Scholarships (Form 1098-T)"

Even if you don't have a 1098-T to enter, continue as if you will.

You will get to a screen where you finally say you don't have a 1098-T and you don't have an exception

The program will ask for additional expenses

Next, the program asks for Scholarships and Grants

Answer "Yes" and Scroll down and Enter the scholarship amount in the proper box and Continue

Answer the questions carefully

The scholarship will be reported on line 1 of the 1040"

Thank you for this information. I worked as post-doc and received stipend. I didn't have federal tax withholding, W2, 1099 forms, and 1098-T for the stipend I received. In my case, can I still follow your steps to enter the stipend I received? Are stipend subject for FICA tax if they are reported on line 1 of 1040 form? 

I have seen other answers saying that to report the stipend to "Less common income" --> "Other income not already reported on a form W-2 or Form 1099" --> "Any other earned income". And this will report the fellowship on line 7 of your Form 1040, and will not be subject to Self Employment Tax.

I am not sure which one I should do. Thank

 you so much!!  

If you are paid a stipend, it isn't considered wages so you won't pay Social Security or Medicare taxes on it. But, it still counts as taxable income for income tax purposes.

A scholarship or fellowship grant is tax free (excludable from gross income) only if you are a candidate for a degree at an eligible educational institution. Any amount of scholarship or fellowship that is greater than your education expenses is taxable.

If you have offsetting education expenses enter the scholarship or grant  as part of your education expenses.

Select Federal Taxes
Select Deductions and Credits
Select Show More at Education
Select Start or Update at Expenses and Scholarships (Form 1098T)
Select Edit at Scholarships/Grants (for all schools

If you do are not a candidate for a degree, or if you do not have offsetting education expenses, the fellowship should be reported as less common income.

• Select Federal Taxes
• Select Wages and Income
• Scroll down to Less Common Income and select Start or Review
• Select Start next to Miscellaneous Income 1099A, 1099C and enter the information provided on your form

See IRS Publication 970 for additional information.

https://www.irs.gov/publications/p970/ch01.html

View solution in original post

Great post on 1099-MISC for student stipend. Best I have seen,

Dis not see any screenshots fore the PC program you referenced at the end of your email.

Could you PLEASE forward to me at [email address removed]?  Am helping my daughter complete her return and want to finally get this done.  TT standard entry steps driving me crazy and misleading for correct stipend entry.

Kevin

Unfortunately, we cannot send you an Email from this platform.  Please be specific on what you need help with on the entry screens. 

Do you have the Online version, or do you have the Desktop/CD version.  They have slightly different descriptions.

Hello,

Has the form changed this year? I am a fellowship recipient, and received my letter stating how much I received in my fellowship, but I also received a separate 1098-T for the tuition that I received a scholarship for (separate to my fellowship). Would I then list my fellowship under other income as you said? I did it last year and the form seemed different. Thanks for your help.

Since you have the scholarship that covers your tuition from the Form 1098-T, you will report your fellowship amount under Other Reportable Income.  Here are the steps:

In TurboTax online edition, 

• After sign into your account, select Pick up where you left off
• To your left, select Federal 
• Scroll down to  Less Common Income / Miscellaneous Income 1099-A, 1099-C, select Start
• Next screen, scroll all the way down to Other Reportable Income, select Start to enter information

@PhdStudent85

You receive a Form 1098-T when you paid tuition amount to your school.  When you also received a scholarship that fully covers your qualified education expenses, it is like a wash.  You do not get any tax break.  However, if your scholarship does not cover all of your education expenses, you may still claim either a credit or deduction on your tax return.  However, if your scholarship exceeds your education expenses, the difference will be treated as wages added on line 1 of your Form 1040.  If you meet certain requirements, you may qualify for an education tax break including the American Opportunity Tax Credit AOTC, Lifetime Learning Credit or Tuition & Fees deduction. To see if you qualify, here are the links: 

Qualified expenses

Deductions

Credits

To enter your Form 1098-T in the program, here are the steps:

• Sign in to your account, select Pick up where you left off
• At the right upper corner, in the search box, type in "1098t" and Enter
• Select Jump to 1098t
• Follow prompts

Hi!

So I have an NSF GRFP fellowship, but my university does not report the stipend on the W2 as wages, and I do not receive a 1098 form. Additionally, my previous W4 withholding amount was not updated after I received the fellowship, so my W2 makes it seem like I am withholding taxes without getting paid any wages — which runs into some issues when entering into Turbotax. Is there a way to potentially fix this?

Thank you!

You can report the withholding in the Estimated Payments section.

1. Click on Federal >  Deductions & Credits.
2. In the Estimates and Other Taxes Paid section, click on the Start/Update box next to Estimated Tax Payments. 
3. On the next screen, click the Start/Revisit box next to the appropriate line [Federal, State or Local] estimated taxes for 2020.

@iceit12345

Hello, I am a post doc who was switched to a T32. For 2020 taxes, I have a W2 from my previous salary through the university, but I stopped being a university "employee" and was switched to a T32 around October. As far as I could find I was not given a T1098, nor did I receive any letter with the amount of my salary for the year that came from the T32. I calculated it on my own based on my payslips/bank info.  

I just want to make sure I am understanding the steps correctly because it was a bit tricky to add myself as a student.

I input my regular W2 information under the Wages section.

Then, I input my calculated T32 income under (sorry it is long!): 

Deductions and Credits >  Education >  Expenses and Scholarships (Form 1098-T)  > Put I DID NOT receive a T1098 yet > Put that I qualify for an exception > Added school info (and said that I don't know the school ID) > Said I paid ZERO tuition > Said I was a student in a different kind of program > Said I was NOT enrolled in a certificate or credential program > DID NOT take college level classes in 2020 > DID NOT take classes for job or career > NOT enrolled in an eligible school > DID NOT go to another school > DID NOT pay for books or make payments towards an education loan > Said I DID receive a scholarship or grant in 2020 > Entered the amount I calculated from the T32 > Said my aid was NOT designated to pay 2020 education expenses > Entered the amount I calculated from the T32 again here > I DID NOT pay for room and board etc > Said I earned  4 years of college credits before 2020... and then completed the last two questions about American Opportunity/Hope Credit and Felonies

This was how I managed to add myself as a student like one of the previous posts indicated. Before this, I tried going through "Less Common Income" option but was told to upgrade. I just want to make sure that I added myself as a student correctly/ this is the appropriate way to handle this particular tax situation situation. 

It depends. Since this is income not subject to FICA. It is income regardless on whether or not you are a student. Since you do not have a 1098-T, the only way you can enter this is as miscellaneous income in the following manner. Trying to enter the way you described can lead to confusing and the IRS does not like confusion since there was no 1098 issued.

1. Go to federal>income and expenses>all income>>show more 
2. Less Common Income> Start
3. Miscellaneous Income,>start
4. Other reportable income>start
5. Next screen asks Any Other Taxable Income>yes
6. The next screen will allow you to report the income with a brief explanation.
7. Here I would enter T32 fellowship income and the amount.

[Edited 03-07-2021|4:17 PM PST]

Hi, 

If I have a fellowship and receive a stipend but did not receive any forms to complete my taxes where would I include this income? @JohnB5677 

Note: I am not a candidate for a degree.

My son received a small undergraduate fellowship stipend (under $800) for research work with a mentor - no taxes withheld.  The professor received a grant for the research.  The school never sent a tax form, so my son went ahead and filed his taxes including the amount as taxable SCH income on line 1 of 1040, which is what he did the prior year.  Just yesterday, they sent him a 1099-NEC.  Is this right???  Seems they should have sent a W-2 or 1099-MISC.  He is most definitely not self-employed. Trying to figure out if he needs to file an amended return. 

Form 1099-NEC was issued this year replacing what has previously been issued using Form 1099-MISC box 7.   Your son has included the income on his return.  No further action is needed.  Retain the Form 1099-NEC with his tax records.