Fulbright scholarship and wages

[krisover]

I have a Fulbright Scholarship for 2015-2016 for teaching and research, so half of it is taxable as wages and half is considered untaxable scholarship. Where do I report the amount that's taxable? As foreign income, or as 'other wages' not on a W-2 or a 1099? And where do I report the scholarship half?
Also, because I'm away from my tax home for under one year, do I qualify to deduct airfare, lodging, and food expenses? Where do I do that?

[derek-turner]

I think it matters whether you are a student working toward a degree (in which case the Fulbright scholarship is not taxable) vs. a faculty member with a research Fulbright, not working toward a degree (in which case the grant is taxable income).

[MargaretL · Accepted solution]

To report scholarship income in Turbo Tax, you must visit Deductions and Credits, Education Expenses section. You must answer all the questions, the taxable amount will be computed as the excess of your scholarship over the qualified education expenses. It will be reported on line 7, form 1040, with a note “SCH” in the margin next to line 7.

1.       Deduction & Credits, Jump to Full List

2.       Scroll down to Education

3.       Select Expenses and Scholarships

4.       Follow the prompts… It will be somewhat confusing as you are answering the questions as if you claim an education credit… answer the initial questions and select that you did not receive form 1098-T. You will be asked for school’s name and address, just fill out the foreign program information you are in... Leave fields blank that ask about the tuition paid and billed, eventually you will be directed to the Scholarship or Grant screen where you can report your scholarship.

Additionally, you should visit Foreign Earned Income and Exclusion to see if you qualify to exclude your foreign wages. (You mention being in a foreign country less than a year, you must be physically present in a foreign country or countries for at least 330 full days during the 12-month period to qualify for exclusion)

1.       Wages and Income, Jump to Full list

2.       Scroll down to Foreign Earned Income and Exclusion. You will be able to indicate that you do not have a W-2 but a statement from your foreign employer (this option also includes cash).  Follow the prompts and please be sure to report the income in U.S. dollars. 

If your employer provided funds for lodging and meals, you may be able to qualify for the housing exclusion. Turbo Tax will ask you questions about that in Foreign Earned Income and Exclusion section.  Otherwise, the airfare, lodging and meals are not deductible.

[cohenmalloryf]

I'd like to follow up on this. My Fulbright scholarship can only be considered "wages," but I was paid by the U.S. government— not by anyone in the foreign country I was living in. Does this still count as "Foreign Earned Income?"