What is fellowship income

Search Search. Helpful Tools How do I? Will be required to report and remit taxes on this income when filing a US tax return. Will receive a letter from Payroll Services at year end State taxes — not withheld at source. Fellowship income is considered part of your taxable income. IRS Publication is the definitive publication on the taxability of fellowship and scholarship income.

A scholarship is generally an amount paid or allowed to, or for the benefit of, a student whether an undergraduate or a graduate at an educational institution to aid in the pursuit of his or her studies. A fellowship grant is generally an amount paid for the benefit of an individual to aid in the pursuit of study or research. So you can see that fellowship grants are much more broad; they can be issued to non-students, whereas scholarships only go to students.

Chapter 1 of Publication approaches fellowships and scholarships from the perspective of trying to make them tax-free. 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.

More In Help. Tax-Free If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions: You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.

Taxable You must include in gross income: Amounts used for incidental expenses, such as room and board, travel, and optional equipment.

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