Stipends are taxed differently depending on why you receive them
Whether you pay tax on a stipend depends on what the stipend is for. A stipend for education, research, or religious training is usually not taxable income. A stipend for work — even part-time or temporary work — is taxable like wages. A stipend for living expenses while you study or train may or may not be taxable depending on the program and the rules that govern it. The IRS does not tax all stipends the same way, so you need to know the specific reason you received yours.
The organisation that gave you the stipend should tell you whether it is taxable. If they do not, you can ask them directly, or you can look at the tax form they send you at the end of the year — usually a 1099-NEC, 1099-MISC, or W-2, depending on the type of stipend and the type of organisation.
Key Takeaways
- Stipends for education, research, or religious training are usually not taxable if they go directly to tuition, fees, books, or equipment.
- Stipends for living expenses while you study are taxable unless the program qualifies under specific IRS rules for scholarships and fellowships.
- Stipends for work or services — including internships, residencies, and apprenticeships — are always taxable as wages or self-employment income.
- The organisation that paid you must report the stipend on a tax form; check that form to see whether the amount is marked as taxable.
- If a stipend is taxable, you report it on your tax return even if you did not receive a tax form.
Stipends for education and training are usually not taxable
A scholarship or fellowship stipend is not taxable if the money goes toward tuition, fees, books, supplies, or equipment required for your course of study. This applies whether you are in a degree program, a certificate program, or a non-degree training program. The key is that the money must be used for education-related costs, not for living expenses.
A research stipend is usually not taxable if you are a student and the stipend is part of your education — for example, if you are paid to do research as part of a graduate program or if a university pays you to information a professor. However, if you are a professional researcher or the stipend is payment for work rather than part of your education, it becomes taxable.
A religious training stipend — money paid to you while you train for the ministry or priesthood — is not taxable if it comes from a religious organisation and is used for your training costs. This includes room, board, and tuition while you are in training.
Stipends for living expenses while you study are taxable
If your stipend covers room, board, or other living expenses while you are a student, that portion is taxable income. The IRS treats living expenses as personal expenses, not education expenses, even though you need them to stay in school.
For example: You receive a $10,000 stipend. $6,000 goes to tuition and books (not taxable), and $4,000 goes to rent and food (taxable). You report the $4,000 as income on your tax return.
Some programs — particularly graduate fellowships and certain employer-sponsored education programs — have rules that allow living expense stipends to be non-taxable under specific conditions. These are rare and usually require that the stipend be part of a formal degree program and that you meet other requirements. Ask the organisation that paid you whether your stipend qualifies under these rules.
Stipends for work are always taxable
If you receive a stipend in exchange for work, services, or labour, it is taxable income. This includes:
- Internship stipends
- Residency stipends (medical, legal, or other professional training that involves work)
- Apprenticeship stipends
- Teaching assistant or research assistant stipends
- Stipends for part-time or temporary employment
- Stipends paid by employers for training or development
The organisation will report this as either wages (on a W-2) or as non-employee compensation (on a 1099-NEC or 1099-MISC). You report it as income on your tax return regardless of which form you receive.
What tax form you receive tells you whether the stipend is taxable
At the end of the year, the organisation that paid you should send you a tax form. The form and the way the amount is reported on it tell you whether the stipend is taxable:
| Form | What it means |
|---|---|
| W-2 | The stipend is taxable wages. You are an employee. Report it on line 1 of Form 1040. |
| 1099-NEC | The stipend is taxable non-employee compensation. You are self-employed or an independent contractor. Report it on Schedule C. |
| 1099-MISC | The stipend may be taxable or non-taxable depending on which box it is reported in. Check the form or ask the organisation. |
| No form | The stipend may still be taxable. If the organisation did not send you a form, you are still required to report it if it is taxable income. |
If you do not receive a form but you believe the stipend is taxable, report it anyway. If you do not receive a form but you believe the stipend is not taxable, keep your own records showing why — for example, a letter from the organisation stating that the stipend was for education and was not taxable.
How to report a taxable stipend on your tax return
If your stipend is taxable, you report it on Form 1040, the main individual income tax return. Where you report it depends on what type of stipend it is:
- Wages (W-2): Report on line 1 of Form 1040 under "Wages, salaries, tips".
- Self-employment income (1099-NEC or 1099-MISC): Report on Schedule C (Profit or Loss from Business), then transfer the net profit to Form 1040.
- Other income: If the organisation reports it in a way that does not fit the above categories, report it on line 8 of Form 1040 under "Other income".
If you received a W-2, the organisation has already withheld federal income tax from the stipend. If you received a 1099 form, no tax was withheld, and you may owe tax when you file. If you owe a large amount, you may need to make estimated tax payments during the year.
Frequently Asked Questions
Do I have to report a stipend if I did not receive a tax form?
Yes, if the stipend is taxable income. The IRS requires you to report all income, whether or not you receive a form. If you did not receive a form but you believe the stipend is taxable, report it on your return. Keep records showing the amount and the source.
Is a graduate fellowship stipend taxable?
It depends on the fellowship rules and what the money is used for. Portions used for tuition and required fees are usually not taxable. Portions used for living expenses are usually taxable. Some fellowships have special rules that allow living expense stipends to be non-taxable. Ask the fellowship organisation for their tax treatment.
What if my stipend is reported on a 1099 form but I think it should not be taxable?
Contact the organisation that paid you and ask them to explain the tax treatment. If they agree the stipend should not be taxable, ask them to send you a corrected form or a letter explaining why. Keep that letter with your tax records. If you disagree with how they reported it, you can report it differently on your return and include a note explaining why.
Do I owe self-employment tax on a taxable stipend?
Only if it is reported on a 1099-NEC or 1099-MISC as self-employment income. If it is reported on a W-2, you do not owe self-employment tax — the organisation has already withheld payroll taxes. If you are unsure, check the form you received.
Can I deduct education expenses if my stipend is taxable?
You may be able to deduct education expenses using the American Opportunity Credit or the Lifetime Learning Credit, but the rules are complex and depend on your income and the type of education. You cannot deduct the same expenses twice — once as a non-taxable stipend and again as a credit. Speak with a tax professional if you have both a stipend and education expenses.