NRSA T32 Fellowship income and FICA exemption

Forum|Forum|6 years ago
January 14, 2020
3 replies
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Hi, I'm a postdoctoral fellow with a NIH T32 training grant that I receive as a monthly stipend. According to IRS (https://www.irs.gov/pub/irs-wd/1117026.pdf), this type of stipend is exempt from medicare and social security taxes (FICA). How can I enter this income as exempt from FICA in Turbotax? This question has been asked 4 times* in the past on the Turbotax forums but none of the answers are correct. Either entered through ''Miscellaneous Income, 1099-A, 1099-C'' or ''Scholarship'' under ''Deductions and Credits'', TurboTax treats this information as a wage and does not treat as exempt from FICA. Is there a way to enter this fellowship exempt from FICA?

Previous posts about this issue that do not solve the problem:

https://ttlc.intuit.com/community/taxes/discussion/i-have-a-postdoctoral-fellowship-and-received-a-1099-misc-but-it-should-not-be-subjected-to-fica-as/00/349151

https://ttlc.intuit.com/community/college-education/discussion/t32-nrsa-grant-income/00/416576

https://ttlc.intuit.com/community/taxes/discussion/i-have-received-postdoctoral-fellowship-from-nih-for-2016-which-is-not-included-in-my-w2-where-do-i/00/330821

https://ttlc.intuit.com/community/taxes/discussion/i-was-on-a-t32-fellowship-with-last-check-on-july-1-2016-and-i-got-hired-in-the-same-lab-under-an/00/680235

TurboTax Deluxe Online

Hal_Al

Employee

How was the income reported? W-2, 1099-Misc (which box), 1098-T or some other way, including not at all?

Report the income as scholarship. Enter it in the education section, under education expenses (you'll eventually get to a scholarship screen).

Older post referencing entering scholarship at Miscellaneous Income, 1099-A, 1099-C are not valid for current software

APAAuthor

I think my question is clear: Either entered through ''Miscellaneous Income, 1099-A, 1099-C'' or ''Scholarship'' under ''Deductions and Credits'', TurboTax treats this information as a wage and does not treat as exempt from FICA. Is there a way to enter this fellowship exempt from FICA?

Hal_Al

Employee

It only appears that TurboTax (TT) is treating it as wages, when entered as scholarship, under education expenses/deductions and credits, because TT adds the amount to line 1 of form 1040. But, it also includes the notation "SCH". That notation keeps it from being subject to FICA. TT will not generate form 8919 to calculate FICA, as it does when other wages are added to line 1.

thwarted

I agree with your observation. I'm going to see my tax guy, turbotax not helpful on this.

skhanal

Hi,

Did you figure out where T32 fellowship amount should be entered for FICA exemption while using turbotax? Please advice

AmyC

Employee

@skhanal Please look through the posts from @Hal_Al as they are correct. The IRS knows the education fellowship is exempt from FICA.

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lulul13

@AmyC I read through @Hal_Al 's post and think I got everything fine so far. My question is how I am supposed to report expense for this income. After I entered the 1099-MISC income as described in @KrisD15's post, I got message that I should enter the expense in business items section but it doesn't seem to know to link it back to the 1099-MISC. The main expense for last year was work from home related, home office and expenses for purchase of supplies. Thank you!