Reporting Scholarship or Fellowship Income on Your Tax Return

If your only income is a scholarship or fellowship that is tax-free, based on the above rules, you do not need to file a tax return.

Do You Need to File?

If part or all of your scholarship or fellowship is taxable, you will need to check the filing requirements for your filing status and level of income to see if you have to file a return.  If you can be claimed as a dependent on someone else’s tax return (such as your parents), and you have unearned income such as dividends, interest, or capital gain distributions in addition to your scholarship or fellowship income, you should check the special requirements for filing a return in those circumstances.  You can find these requirements in Internal Revenue Service (IRS) Publication 501, Exemptions, Standard Deductions, and Filing Information, or in the instructions for Form 1040EZ, 1040A, or 1040.  These forms, instructions, and publications are available in the IRS website.

If part of your benefits include compensation for services or work you performed, and income tax was withheld, it may be to your advantage to file, if too much tax has been withheld and you are due a refund.

Eligibility for Other Tax Benefits for Education

You should also see whether you qualify for any of the tax benefits available for education, including the tuition and fees deduction, which is an adjustment to gross income, and the Hope and Lifetime Learning Credits, which are credits that directly reduce your tax.

Where To Report

If you have taxable scholarship or fellowship income to report and you receive a Form W-2 reporting your income, you should include this amount in the line for “Wages, salaries, tips, etc.” on Form 1040EZ, 1040A, or 1040.  If you do not receive a Form W-2 but you have taxable amounts, you should report them on the same line, and write "SCH" on the dotted line next to the amount.

Independent Contractor

If part of your scholarship or fellowship included compensation for your work as an independent contractor, you will have self-employment income.  In this case, you will have to file Schedule SE and pay self-employment tax, in addition to federal income tax, on your earnings.  As an independent contractor, you may also have related business expenses and could file Schedule C, Profit or Loss from Business.