I am currently employed full-time in a post-grad fellowship program, and my income is considered "taxable Scholarships and Fellowship Grants". Where do I enter this?

Forum|Forum|3 years ago
April 5, 2023
2 replies
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I was able to enter the estimated amount I have already paid via 1040-EZ, but I don't see anywhere to include my actual income information.

TurboTax Deluxe Online

Vanessa A

There is no longer a 1040-EZ, everyone files a form 1040 along with Schedules 1 through 3 to report anything that is not covered instantly on the 1040.

If your income is considered taxable scholarships and grants, then you would enter it by selecting the following:

Federal
Income and Expenses
Scroll down to Less Common Income and click Show More
Start next to Miscellaneous Income
Start next to Other Reportable Income

This will put it on line 8z of your schedule 1 as other income.

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luco1919Author

Hi @Vanessa A thank you for the helpful response! I think this is almost what I need. According to a sample that the program gave us, I think it is supposed to be reported on line 8r "Scholarship and fellowship grants not reported on Form W-2". Does it matter if it is reported on 8z instead? Thanks!

Hal_Al

Employee

Q. I think it is supposed to be reported on line 8r "Scholarship and fellowship grants not reported on Form W-2". Does it matter if it is reported on 8z instead?

A. Maybe. Anything reported on line 8z is classified as unearned income. Scholarships are a hybrid between earned and unearned income. It is earned income for purposes of the $12,950 filing requirement and the dependent standard deduction calculation (earned income + $400). It is not earned income for the kiddie tax and most other purposes (e.g. EIC) For grad students and post grad fellows, it is earned income for the purpose of IRA contributions. TT can handle the dual treatment of the scholarship income.

Hal_Al

Employee

I assume you meant 1040-ES, not 1040-EZ.

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

--Education Expenses and Scholarships

The interview will allow you to bypass the 1098-T screen (click that you qualify for an exception). A 1098-T is not mandatory.

After answering no to having a 1098-T, answer yes to qualifying for an exception (that gets you to the entry screens). You will have to go thru the whole education interview to get to the scholarship screen. At the scholarship screen, enter the amount of the grant. When asked if any was used for room and board, answer yes. Then enter the amount you want to be taxable (usually all of it), in the pop up box. R&B are not "qualified expenses". So, this is how you tell TT that it is taxable. Note the wording at that screen “or other expenses”. You didn’t have to literally use the scholarship for R&B.

The income is reported on line 8r of Schedule 1. This line, for reporting scholarship income, is new for 2022.

DNich

this works to get my income on line 8r of schedule 1, but it will not allow me to make an IRA contribution without charging me 6%. How can I avoid this error?

Hal_Al

Employee

Only grad students and post grad fellows (not undergrads) are eligible for an IRA contribution with scholarship and stipend money.

New for 2022: During the IRA contribution interview, you will get a screen "How much of the taxable Scholarship was for Graduate or Post-Doctoral Studies". You will need to enter the amount that applies to it here. https://ttlc.intuit.com/community/retirement/discussion/re-error-in-turbotax-handling-of-new-schedule-1-line-8r-scholarship-income-for-determining-ira/01/3016014#M199026 (screen shot)

In the past, you told TT that you were a grad student by checking the grad student box on the 1098-T. So, an alternate entry method is: If you don't actually have a 1098-T, enter one anyway so you can check that box (as long as you not claiming a tuition credit, a phony 1098-T is not sent to the IRS, it's just an entry tool).