How to report a fellowship stipend?

[chi-ransdell]

My husband is a post doctoral for a university got paid via fellowship stipend. The university did not send home a W2 or 1099 Misc, instead they sent a letter notifying us of the grossed up amount and that all or some portion of it may be taxable.  So does this mean the amount that exceeds the expenses outlined in IRS Publication 970 will be the taxable income?

[Fern · Accepted solution]

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

[Mahdi]

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!

[verovskayae]

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

[KrisD]

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.

[katiesarahtp]

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).

[eunchung-chung]

That worked!

[ajmwfuller]

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

[grahamk83]

Same here.

[leftrightbrian]

Thank you!

[Anonymous]

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

[KrisD15]

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"

[s0951782]

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!!  

[JohnB5677]

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

[DrDoomMeteorologist]

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