I received a non-taxable fellowship award of $345 in 2022. I was a graduation candidate for a degree program at a qualified institution.100% of the fellowship was required to be used toward tuition.100% of the fellowship was thus put toward a qualified expense.No portion of the fellowship was a payment for required services.The Interactive Tax Assistant on the IRS website confirms that this fellowship is non-taxable and is not to be included in my income.Turbo tax included the $345 in my income and this reduced my return. Please fix this error.

S

SerNDipity

Question

Error: Non-Taxable Fellowship was added to my adjusted gross income

Forum|Forum|3 years ago
January 16, 2023
1 reply
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I received a non-taxable fellowship award of $345 in 2022.

I was a graduation candidate for a degree program at a qualified institution.
100% of the fellowship was required to be used toward tuition.
100% of the fellowship was thus put toward a qualified expense.
No portion of the fellowship was a payment for required services.
The Interactive Tax Assistant on the IRS website confirms that this fellowship is non-taxable and is not to be included in my income.

Turbo tax included the $345 in my income and this reduced my return. Please fix this error.

TurboTax Deluxe Online

J

JohnW152

In rare situations, you may need to make an adjustment to Form 1098-T. If a scholarship is reported as income in box 1 of a W-2 and the same amount is also reported in box 5 of Form 1098-T, then you will need to remove the amount from box 5 of Form 1098-T.

Does this appear to be your scenario? If not, please provide a bit of clarification.

Was this fellowship reported on a Form 1098-T you received, most likely in box 5?

If not, where is the TurboTax program getting the $345 amount from?

According to Tax-Free Scholarships and Fellowship Grants in IRS Publication 970, [a] scholarship or fellowship grant is tax free only to the extent:

It doesn't exceed your qualified education expenses;
It isn't designated or earmarked for other purposes (such as room and board), and doesn't require (by its terms) that it can't be used for qualified education expenses; and
It doesn't represent payment for teaching, research, or other services required as a condition for receiving the scholarship.

Please see the bolded section referred to above for more information about the potential non-taxability of fellowships.