How to Report Graduate Student Stipend in TurboTax

[kmurray418]

What do you do if you get a stipend from a fellowship you were not  issued a 1099 or W-2?   The only thing my son received from the University was his 1098 T.   It shows scholarships and grants at $ 33,000 and school expenses at $ 17,000.  When I enter that information it shows he owes taxes on the difference.  He is worried he needs to report this as income too.  I am not sure how to do this without a paper trail.  Also does he have to pay state tax on this too.   Please help !!!!!

[ThomasM125]

@kmurray418 Scholarship income is taxable to the extent it is more than your qualifying education expenses. So, in your case that is true so the income is taxable. I imagine some of the money was spent on room and board, but unfortunately those are not considered qualifying education expenses.

[kmurray418]

Thanks but does my son also have to claim the stipend as misc income ? Or it just in the education section of the tax return 

[AmyC]

Yes, your son needs to report this income at the federal and state level. This is ordinary income and should be taxed that way. It does not involve the SE taxes. He can enter it in the education section on his return.

[kmurray418]

What are SE taxes?  How come the university isn’t issuing any income paperwork besides the 1098T?  This is so confusing!

[ReneeM7122]

SE taxes are self employment taxes and the software generates the calculation if a Schedule C is present.  It sounds like your stipend may be triggering this because it could have been entered in such a way that the program thinks it is self employment.  You can delete the worksheet and start again. Here's how:

How do I view and delete forms in TurboTax Online?

• Open or continue your return in TurboTax.
• In the left menu, select Tax Tools and then Tools.
• In the pop-up window Tool Center, choose Delete a form.
• Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

@kmurray418​​​​​​​

[kmurray418]

Thanks very much but I am still unsure where I am reporting this since we have no W2 or 1099.  Am I just filling in the  1098 T in the education section?

[AmyC]

Yes. When you enter the 1098T and the scholarship is larger than the tuition and expenses, the program will turn that into scholarship income.

[kmurray418]

Thanks for you help.  I did what you said.  It does show the taxes he has to pay for this.  My next question is about state taxes.  Turbo tax is not bringing this in as income on the state level.  Does that mean this is not taxable in this particular state?  

[AmyC]

It is taxable at the state level as well. You must be in a state that does not start with the federal AGI. The program should ask about the income in the state section or have a place to add it.

[alih26]

Did you figure this out? I am in the same situation as your son where I was issued a W-2 which I filled out covering Jan-Sept but Sept-Dec I was covered by a fellowship and received 1098 T and nothing else for that time. My Box 5 on this is higher than my box 4 by $857 so I think that I only have to pay taxes on this difference. I paid my estimate taxes already via the IRS payment system, so I am confused at where to enter this payment.

[KathrynG3]

For the income earned and taxes paid, report it in TurboTax by following these steps:

• Form W-2: 
  • Inside TurboTax, in the search box, enter W2 and select the Jump to link in the search results to continue.
• Form 1098-T with an amount in Box 5 larger than Box 4: Box 4 is for an amount that was reported from a previous year and will reduce the amount in Box 1. Taxes will be paid if the result is positive from: Box 5 - Box 1 - Box 4. 
  • Inside TurboTax, in the search box, enter education and select the Jump to link in the search results to continue.
• Estimated Tax Payments: 
  • From inside the program, enter estimated tax payments in the search box.
  • Select the Jump to link in the search results.
  • Scroll to 2020 Federal Estimated Payments and enter the date paid and the amount.
    • If you also made state and/or local estimated payments, there are 2020 State Estimated Payments and 2020 Local Estimated Payments below the 2020 Federal Estimated Payments to report these amounts, as well.

[alih26]

Thanks @KathrynG3 , your reply was really helpful! I realized I actually don't have any money in box 4, i misread it the first time, but your reply really helped understand the form better. I have another followup question if you have the time! So when I subtract ox 1 from box 5 is that the amount I list as a response to the amount for Other Scholarships/Grants/Fellowships under the question Did you Receive a Scholarship or Grant in 2020?

[ReneeM7122]

Yes, when you subtract ox 4 from box 5, that's is the amount you list as a response to the amount for Other Scholarships/Grants/Fellowships under the question Did you Receive a Scholarship or Grant in 2020?

@alih26

[alih26]

I've actually been looking more deeply into this and I am not sure what you're saying @ReneeM7122  is correct. I just wanted to write that here in case others read it. I found out how to enter the 1098 T into TT and doing that allowed all the information about my scholarship to be entered without doing the math myself. What I am understanding is that you are not supposed to do your own math, turbo tax does it for you.