<p>I am sure that this question has been asked, but tax time is approaching. We have a student that participated in a National Scince Foundation REU last summer. It was indeed a grant from the NSF. Also received stipend for travel expenses to and from current uni. The W-2 received from the uni does not show any numbers with regard to the amount of the grant, much less the travel reimbursement. My question is: Are there any parents/students that have participated in past REUs that can tell me how this is handled with regard to filing a tax return? Did a W-2 have all the necessary info for filing? That is all the REU-uni has e-mailed to our student and somehow I think that this money is indeed taxable. The National Science Foundation could not help and the REU-uni/Dept head could not seem to answer either. Help!</p>
<p>Foundations and universities are sometimes reluctant to provide advice on the “taxability” of funds flowing through their institutions. (Yes, I have first-hand experience, and it took two years plus a Congressional Directive to resolve.) So I wouldn’t read anything into their refusal to assist. On the other hand you shouldn’t assume the money is non-taxable either. Good luck with your research.</p>
<p>I don’t know if this is applicable to the NSF money, although I would assume that it is-- When you are paid by a stipend from the government (ie NIH money), there is no withholding, but all income is taxable. You get out of the social security and payroll taxes but still have to pay income taxes both federally and at the state level. I don’t think that the W-2 has this information. You might want to try posting in the grad school forum or asking mollie.</p>
<p>Interestingly, the form (W-2) that was e-mailed to our student did not have ANY information on it as to dollar amount. It did have address, SSN, the REU-UNI and address. It was basically a worthless piece of paper, IMO. How can you pay tax on something if it does not even show the amount paid? Oh, we are trying to do the right thing by believing that this money is taxable. We just don’t know how it is to be filed-- and esp if the uni has not included a dollar amount!</p>
<p>^ I suggest you enter an number commensurate with the benefit derived. The REU-uni was intended to stimulate your S, right? Well the government knows how to value a stimulus package. Just remember to write the $817,000,000,000 in small enough numbers that it fits on the Form 1040.</p>
<p>^^ or you could try posting in grad school forum or asking mollie.</p>
<p>I will, thank you very much!!!</p>
<p>Yup, taxable for sure, unfortunately. Both NIH and NSF money is taxed (as is any scholarship or fellowship that pays for expenses above and beyond required school expenses).</p>
<p>I don’t get any tax forms for my grad school stipend, and nothing is withheld either, but I pay taxes on my income on the line for “other income” (line 21 on the 1040). I list my “other income” as a scholarship.</p>
<p>More info from the IRS is [url=<a href=“http://www.irs.gov/individuals/students/article/0,,id=96674,00.html]here[/url”>http://www.irs.gov/individuals/students/article/0,,id=96674,00.html]here[/url</a>]; scroll down to the heading “Taxable Scholarships and Fellowships.”</p>
<p>Thank you Mollie for your HELP!</p>
<p>Of course! I wish I didn’t know so much. :)</p>
<p>IMO. No.
DS had a hs internship that was called a stipend. The sponsers said that the stipend was not wage and therefore not eligible for IRA contribution. </p>
<p>DS had scholarship, grant, TA/RA, fellowship (substantial) from Toronto. Only a portion was taxable for Canadian and US purposes, The TA wage was obviously taxed but the other portions, I believe not. Canada did tax S for the interest and dividends he recieved while he was in Canada-a try breaking that out of a 1099.</p>
<p>If you use a tax program, follow the questions exactly.</p>
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<p>This is a common misconception. Scholarship stipends ARE taxable even though the issuing body often states it’s not a wage. Remember that wages only make up a portion of your income and taxes are for income, not wages. As stated above, such money is considered ‘other income’ as it’s not reported on a W-2. </p>
<p>Although you don’t pay Social Security or Medicare on scholarship/fellowship income you do certainly owe income tax (although depending on ones situation and the amounts, this may be small to nill). </p>
<p>Universities always throw their hands up in the air when asked these questions… in part this is because they don’t want anyone to think these payments are ‘wages’ as then they’d have to fork out taxes on it (employer contribution to taxes).</p>
<p>As a rule of thumb, all money you receive as a scholarship/fellowship is taxable except for those amounts used directly to pay tuition and certain qualified fees. All other moneys (including funds that you then use to pay room and board) are taxable.</p>
<p>For what it’s worth: our accountant, after consultation with the practice’s tax attorney, gave the same advice as post # 8.</p>
<p>LongPrime, I think the rules are different in Canada – I was having this discussion with a Canadian postdoc in my lab recently.</p>
<p>mollie: Thanks for the info. Son just today won the NSF graduate fellowship lottery for 3 yrs and the tax question popped in. I have another question. If you do an internship during the fellowship period are you supposed to not take the NSF grant for that period?</p>
<p>Congratulations to him!</p>
<p>I don’t actually know what NSF’s rules are on being paid for other jobs while on the fellowship – for my field, it’s not typical to take time during summers to do internships, so it’s a question I’ve never heard addressed.</p>
<p>Mollie: Thanks. He really would like to do 2 corporate research lab internships and do 2 TA and then decide if he wants academic career path or industry. He will do 1 this summer and 1 TA this fall. I am sure it might be possible. One just has to forfeit Govt. subsidy for those months.</p>
<p>Simba, Congrats to your son! My son has an NSF fellowship and told me he won’t be able to do the mentoring he did last summer because it is a paid position. I believe it is possible to defer the fellowship for a year; would that help your son?</p>
<p>Just an update: It seems that son’s school has an admin liaison with NSF and she told him that internship is not an issue - you just forfeit those three months. TAing could be a problem. She will check with NSF. At his school 2 TAing is a requirement.</p>
<p>Best is to talk to a qualified tax preparer/accountant because each situation will vary IMHO. In our case, summer REU type work was placed in Box 3 (Other Income) of 1099-MISC and in addition on campus work (W-2) Box 1. In either case, no tax was withheld. Both these incomes together were below $5750. So we were not required to file.</p>