I thank the NASA SHARP $1,000 stipend earned by hs students during the summer was
taxable. The following is from the www.1040.com website, which is not the official IRS website! Scholarships, Fellowships, and Stipends
Generally, a scholarship or fellowship award made on the basis of need or academic achievement is not taxable if awarded to encourage or allow the recipient to further his or her educational development. The award is taxable as compensation if given for past or present services or in expectation of
Q. I received a full-tuition scholarship to attend the university, where I am enrolled as a full-time student. I received the scholarship based on my academic achievement. Do I have to claim the value of this scholarship as income or compensation?
A. No. The scholarship was awarded to encourage you or allow you to further your education at the institution and therefore is not taxable for PA Personal Income Tax purposes.
Q. What is the criteria for excluding a fellowship award or stipend from taxable compensation?
A. Fellowship awards and stipends are excluded as compensation, if the recipient can show:
(a) The benefits resulting from the services of the recipient are so minimal, given the actual services performed or expected to be performed, that they constitute no realistic basis for compensation by the institution sponsoring the fellowship or stipend; or
(b) The activities of the recipient are so closely and directly supervised and immediately controlled by regular faculty members so as to constitute a burden on the institution which would offset any benefit it receives from the recipients activities; or
(c) The recipient is a candidate for a degree, and the same activities are required for all candidates for that degree as a condition to receiving such a degree.
Q.I am a medical resident. Is my stipend taxable?
A. Stipends paid to medical interns and residents pursuant to an internship or residency program that conforms with the Essentials of an Approved Internship or the Essentials of an Approved Residency as established by the American Medical Association are taxable.
Q. I believe my scholarship or fellowship award is nontaxable. What proof do I need to submit?
A. If you believe your scholarship or fellowship is nontaxable, you must submit with your tax return an original, detailed description of the program under which you received the award. Important: You must submit an original letter, that your department head or other official signs. A form letter is not acceptable.