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I was on a T32 fellowship with last check on july 1 2016 and I got hired in the same lab under an NIH diversity supplement fellowship with 1st check on aug 31st.

The first fellowship didn't take money out for taxes but the second fellowship does.  Can I count this as a new employer even though I in the same lab but being paid by different NIH fellowships?
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GeoffreyG
New Member

I was on a T32 fellowship with last check on july 1 2016 and I got hired in the same lab under an NIH diversity supplement fellowship with 1st check on aug 31st.

The short answer to your question is yes:  you should technically treat the second fellowship as a "different employer" than the first fellowship.  Therefore, you would want to enter them separately onto your tax return (and into the TurboTax software).

The longer answer to your question is much more detailed.  If you received your work payments as regular wages, and they were reported to you on separate W-2s in the traditional manner, then you should simply enter than information and ignore the rest of this discussion.  However, if your fellowship payments were instead reported to you at the end of the year via a letter, statement, document, or anything other than a normal W-2, then the following applies to you.

Many academic and government institutions, along with certain research programs, will report taxable fellowships and stipend income in "nontraditional" ways.  It would be really helpful if all parties involved would take the time to issue actual tax documents, but not all of them do.  It's certainly not an uncommon occurrence; but yes, the fellowship income you received is still considered taxable compensation.  As such, you do (legally) need to declare it and report it on your income tax return, even if it didn't come with a W-2 or a Form 1099-MISC.

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-stipend

Those 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 below for a visual aid; simply click the icon 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 your actual fellowship income amount for the $3,000 plug-figure I used in my example.  When done correctly it should appear on your tax return, as an additional figure on the wages line, with the appellation "SCH."  This income, so reported, is subject to ordinary income taxes, but not to Social Security and Medicare taxes.

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