I have a fellowship program funded by NASA wherein students compete for the fellowship by submitting a program plan, evidence of academic success, past involvement in the pertinent field of study, etc.   The award is considered merit based and is to fund the fellow with a healthy stipend, travel expenses and materials and supplies.

Question 1:  Would you consider the stipend to be taxable even though it is an award based on past academic success and proposed plan of study?

Question 2:  Does your institution have a mechanism to pay a stipend without running through the Payroll system or in the case of a fellowship to a student, through the Financial Aid system.  If so, does such a transaction automatically affect taxable earnings or the aid calculations for the individual?

Question 3:  If run through the procurement system, must a 1099 be generated?  If so, do you know: if a 1099 is issued can the recipient "write-off" as a fellowship or must s/he provide substantive evidence that all revenue was offset by appropriate expenses (educational in this case)?

Thanks in advance for any help you can provide.

Matt

Matthew Ronning
Sponsored Programs
Mississippi State University
p:  662/325-7404
f:  662/325-3803
xxxxxx@spa.msstate.edu
www.msstate.edu/Dept/SPA/

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