Academic institutions, research facilities, and certain government agencies (like the National Institutes of Health) will often do
that, especially at the graduate and postdoctoral levels. It would be really helpful if all schools and programs would take the time to
issue actual tax documents, but not all do. It's certainly not an
uncommon occurrence; but yes, the fellowship income you receive is still
considered taxable compensation. As such, you do (legally) need to
declare it and report it on your income tax return.
This 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-stipendThose 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)
academic
fellowship 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 fellowship income total you have from your personal records for the
$3,000 used in the
demonstration example. The good news is that, while your fellowship 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.
Thank you for asking this important question, and good luck with your professional activities.