Is Fellowship Income Taxable?

Paying for College
1

<p>A question from my older sister who just phoned me (her Internet is down and she is trying to file taxes):</p>

<p>I am a third-year student at Juilliard. I applied for a fellowship (Goldman Fellows Arts Enrichment Program) and was granted $10,000. This fellowship requires that I teach in for two hours in Harlem on Saturdays. In return, I am “paid” $1,000 each month via a Juilliard check. Federal and NY state taxes are withheld from each check. I received a W-2 with $10,000 listed in the “wages, tips, and other comp” box, with applicable federal and state taxes withheld. </p>

<p>Is the entire $10,000 considered taxable income, even though it is a fellowship and I use it to pay my share of tuition? I’m perfectly willing to pay my taxes but just want to be sure before I press the send button on TurboTax tomorrow.</p>

<p>Thank you for any help,
PNWguy’s sister</p>

2

<p>They withheld federal and state taxes, and they gave you a W-2. It is all taxable. Treat this as income from any other regular job you might have had. </p>

<p>You need to find out whether or not you can claim a tax credit or deduction for your various educational expenses. That may depend on whether your parents include you as a dependent or not. More research I know, but you will probably need to run various scenarios with TurboTax to find out which is optimal for you and your parents.</p>

<p>Good luck!</p>