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Re: Taxable Fellowship Stipends? Jeff Myers (11 Apr 2002 13:44 EST)
(Previous discussion continued)
Re: Taxable Fellowship Stipends?

Re: Taxable Fellowship Stipends? Jeff Myers 11 Apr 2002 13:44 EST

Marie:

According to the guidelines we generally follow, fellowships are considered
compensation and are taxable if there obligations associated with the
award.  Obligations could be current or future service requirements such as
conducting research, teaching in a certain location, practicing medicine in
underserved rural area, or a requirement to pay back the award if you do
not complete your program of study, etc.  In short, the fellowship should
be a scholarship to be tax free.  Even if it is not compensation there are
other IRS requirements including being a degree candidate, an absence of
restrictions on items of expenditure, and the extent to which the funds
cover tuition, fees, books, and supplies (the excess may be taxable).

NACUBO has a detailed publication on this issued in February, 2001 written
by Diane Cornell and Mary Rauschenberg.

Jeff Myers
Southern Illinois University

At 03:53 PM 4/10/02 -0400, Marie Smith wrote:
>Hi All
>
>I just had a very distraught student come in to my office.  He is receiving
>a federal fellowship stipend.  He was told by the awarding agency that it is
>not taxable.  H&R Block did his taxes last year and told him that it was not
>taxable.  He received no 1099 or other forms indicating that he needed to
>pay taxes.  He just received an e-mail from his program officer saying that
>his stipend is, indeed, taxable.
>
>If anyone has had experience with this, I would appreciate any insight you
>can give.
>
>THANKS,
>Marie
>
>
>
>%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
>Marie F. Smith, CRA
>Manager of Grants Administration
>Institute of Ecosystem Studies
>PO Box AB, 65 Sharon Turnpike
>Millbrook, NY 12545
>Tel: 845-677-5343
>Direct Line: 845-677-7600 x 202
>FAX: 845-677-5976
>E-mail: xxxxxx@ecostudies.org
>http://www.ecostudies.org
>
>
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