Are fellowship stipends taxed (usa)?

[md152]

I've read conflicting info?

[TakeruK]

It's because it's complicated! Usually, the answer is yes, unless your fellowship is specifically one of the non-taxable ones. Your best bet is to ask other people in your school with the same fellowship (although tax situations can vary between people), or ask the source of the fellowship directly, or read the IRS documents, but I find those very confusing! 

[ss2player]

From what I understand: it is taxed as income, so federal and state taxes will apply but you will have to pay quarterly as opposed to paycheck deduction (so budget for that). You're FICA exempt as a student, however.

[HDFStakeover]

Great advice so far. I would just add that from I got from the IRS website, part of your fellowship may not be taxable. Any amount spent on textbooks, required software, registration/student fees may be exempt. You need to be careful to save all pertinent receipts and to only omit academic related AND required expenses. For example, you cannot just upgrade your computer assuming that amount is part of your school expenses because you use your computer to do school work or research.

[BeingThere]

This is one part of the answer:

 

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

 

irs.gov has the most reliable tax information.  I wouldn't trust other sources without either going through a tax accountant or checking with the IRS.  You can also call and talk to someone there and get answers to your questions.  But the irs.gov website has pretty extensive documentation on all the tax codes, including those relevant to grad students.