Can I believe this? (fellowship)

[Catherine]

New clients; he has a fellowship from a local university.  All they have is a pay stub, claiming the total is NOT taxable.  He inquired about getting a W-2 or 1099 and was told they do not issue those forms for fellowships.

 

I don't know if he does any teaching or research - or even if he is a degree candidate or doing a post-doc.  

 

What questions do I ask of this couple?

 

How much can I rely on the word of this (world-renowned [in general but NOT in my book] ) institution?

 

Thanks.

[Lynn EA USTCP in Louisiana]

http://www.irs.gov/taxtopics/tc421.html

 

For more information, refer to Publication 970, Tax Benefits for Education.

 

Hope this helps, Lynn

[MsTabbyKats]

I get this all the time.  It's  money from a foreign source and is not taxable.

[Catherine]

I get this all the time.  It's  money from a foreign source and is not taxable.

Huh?  A college in Massachusetts is foreign source how?  (Admittedly to me they sometimes seem like they are from somewhere near the orbit of Neptune...)

[MsTabbyKats]

Huh?  A college in Massachusetts is foreign source how?  (Admittedly to me they sometimes seem like they are from somewhere near the orbit of Neptune...)

Yes...foreign sources fund research..all the time.

 

My post docs all get funding from foreign sources....and none of it is taxable.

 

They don't get 1099-Misc or W-2s

 

For example....some of my Russians were funded by something from France.

 

I don't get into the politics of it.

 

Ask them if they do research.....

[Catherine]

I will ask (already sent out a query).  

 

Basically you both confirmed my original impression that the college's "word" on this is not worth spit; I need more details.

[joanmcq]

My post doc client's fellowship is taxable; he got a 1098-T with the amount makes as scholarship. The amount above tuition was taxable.

I had another that just had paystubs from an internship that I had to work from.

[MsTabbyKats]

My post doc client's fellowship is taxable; he got a 1098-T with the amount makes as scholarship. The amount above tuition was taxable.

I had another that just had paystubs from an internship that I had to work from.

But you are allowed to reduce that by other expenses such as books, supplies etc that are related to your studies.....above and beyond the tuition.

[joanmcq]

If there are any.

[Catherine]

Turns out this guy is a prof in CA on *sabbatical* in MA and is only doing research.  So Harvard (grrrr.....) gives him NO 1099, NO W-2, claims none of it is taxable.  Withheld NO tax, fed or state.