A fellowship is an amount paid to or for the benefit of an individual to aid in the pursuit of study, research, or service work such as entailed through a PiLA placement. Per the IRS, scholarship and fellowship amounts are taxable (“nonqualified”) when:
- Amounts are used for room, board, travel, equipment, incidental living expenses, stipends, and other expenses not required as part of their education;
- Amounts are given to non-degree candidates, such as post docs and fellows.
Hence, your PiLA stipend is taxable, and you are responsible for reporting it as income on your annual federal tax return.
Taxes are not withheld from PiLA fellowship payments made to U.S. citizens or permanent residents. PiLA is not required to report fellowship income to the IRS, but upon a fellow's request will provide a letter documenting the fellowship amount.
It is important to keep records and save the information you will need in order to prepare your personal annual tax return. Consult your personal tax adviser to discuss making estimated tax payments for the taxable portion of your fellowship income.