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Ask A CPA - Educational Tax Benefits

Are Fellowship Payments Taxable?

Fellowship amounts are nontaxable where: The recipient is an individual, who is a candidate for a degree at an educational organization (i.e., undergraduates or graduate students, but not post graduate); and The fellowship amount is used for "qualified tuition and related expenses." Qualified tuition and related expenses include tuition and fees required for the enrollment or attendance of a student at an educational institution, This would include fees, books, supplies and equipment required for courses of instruction at such an educational organization. Fellowship amounts are taxable where: Amounts are used for room, board, travel, clerical help, equipment, incidental living expenses and other expenses not required for enrollment in or attendance at the University.

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