This is a general discussion of the federal and California state tax status of common sources of graduate student income. It is not meant to be a substitute for professional tax advice regarding specific individual problems. Since UCSB departmental and central administrative staff may not advise individual students on these matters, students should review available tax materials and make their own decisions about reporting of income, excluding income from taxation, and filing required tax forms. 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.