This tax information reflects taxation policy outlined in the 1986 Tax Reform Act. Tax Status of Common Types of Graduate Student Income 1. Stipends used for other purposes are taxable income. Thus a student receiving a fellowship which includes a stipend, the payment of fees, and tuition, will pay taxes only on the stipend. A student receiving only a stipend will subtract the amounts used from the stipend to pay fees and tuition and pay taxes on the remainder.
Fellowships providing funds for graduate student research expenses are taxable.
For example, nonresident tuition fellowships, fee-paying fellowships, employee fee offsets and Doctoral Candidacy Fee Offset payments are not taxable. Like fellowships, stipends are taxable. Income used for the payment of tuition, fees, books, and course-related expenses is not taxable. All salaries are taxable income. The amount the student pays from earnings for fees, tuition, books, etc. may not be excluded.