Seattle Pacific University provides merit-based awards to enable participation in academic research programs. This award represents an amount that is intended for the benefit of the student to aid in their pursuit of study or research and as such, may be considered a taxable fellowship by the IRS and included in gross income.
Fellowship payments/stipends will be made on a quarterly basis at the beginning of the quarter. Seattle Pacific University does not withhold federal income taxes on fellowships and this award will not be reported to the IRS on either Form 1099 or Form W-2.
The University is not in the position to offer specific tax advice, however we hope that the following general information will be helpful. Students may wish to seek actual advice from a tax professional that is specific to their own tax status.
In general, taxable fellowships, such as this award are reported on Line 7 – Wages, Salaries, Tips, etc., of IRS Form 1040 U.S. Individual Tax Return. Taxable fellowships may normally be included in earned income for purposes of determining the standard deduction allowed if an individual can be claimed as a dependent on another’s tax return. Taxable fellowships are generally not considered income from self-employment and are not subject to self-employment tax. Tax Court case No. 15829-92 support this, in the event your tax accountant or the IRS should question you about this.
You may find the following IRS forms, instructions, and publications helpful:
• Form 1040 Individual Return and Instructions
• Publication 970, Tax Benefits for Education
• Publication 525, Taxable and Non-taxable Income
These publications may be downloaded from the IRS Forms and Publications website located at http://www.irs.gov/formspubs/index.html