Stipend taxation
How stipend tax works in 2026
A stipend is a fixed payment to support living expenses during research, study, or training. Whether it is taxable — and how — depends on the type. Graduate fellowship stipends paid to degree-seeking students are subject to federal income tax on the portion exceeding tuition and required fees (IRC Section 117), but are exempt from FICA. Stipends paid for services rendered (teaching assistant, research work) are wages subject to both income tax and FICA or self-employment tax.
Fellowship vs. service stipend
A true fellowship supports your education without requiring specific work. It is reported on your 1040 but not subject to Social Security or Medicare tax. A stipend for services — teaching, lab work, clinical rotations — is treated as employment wages or self-employment income, adding 15.3% SE tax (12.4% SS + 2.9% Medicare) on top of income tax. The distinction matters: a $30,000 fellowship at the 10-12% brackets costs roughly $1,700 in tax, while the same amount as self-employment income costs roughly $5,900.
| Stipend | Fellowship tax (single) | 1099/SE tax (single) | Difference |
|---|---|---|---|
| $25,000 | ~$1,070 | ~$4,600 | $3,530 |
| $30,000 | ~$1,670 | ~$5,900 | $4,230 |
| $35,000 | ~$2,270 | ~$7,200 | $4,930 |
Approximate federal tax for single filer, 2026 brackets. Fellowship = income tax only; 1099 = income tax + 15.3% SE tax.
Employer education assistance ($5,250)
Under IRC Section 127, employers can provide up to $5,250 per year in tax-free education assistance for tuition, fees, books, and student loan payments (2026). Amounts above $5,250 are taxable as supplemental wages. If your employer offers a learning stipend, only the portion exceeding $5,250 is included in your taxable income.
Estimating your take-home
Use this calculator for a quick stipend tax estimate. For a comprehensive view that includes state tax and other income sources, pair it with our salary after taxes calculator or estimated quarterly tax calculator.
Questions
Stipend tax calculator FAQ
Are stipends taxable?
Most stipends are taxable as ordinary income. Graduate fellowship stipends, research stipends, and employer-provided stipends for wellness or remote work are generally taxable. The portion of a fellowship or scholarship that covers tuition and required fees at a degree-granting institution is tax-free under IRC Section 117, but amounts for living expenses, room, and board are taxable.
Do stipends have tax withheld?
It depends on the relationship. If you receive a stipend as a W-2 employee, your employer withholds federal income tax and FICA. If the stipend is a fellowship or independent payment (no W-2), taxes are typically not withheld, and you must make quarterly estimated tax payments to avoid penalties.
Is FICA withheld from a fellowship stipend?
Generally no. Fellowship and scholarship stipends paid to degree-seeking students are not considered wages for FICA purposes, so no Social Security or Medicare tax is withheld. However, if the stipend is payment for services (teaching, research) rather than a true fellowship, FICA applies.
How do I report stipend income?
If you receive a W-2, the stipend is included in your wages. If you do not receive a W-2 or 1099, report the taxable portion of a fellowship on Line 8r of Schedule 1 (Form 1040). If you receive a 1099-MISC or 1099-NEC, report it on Schedule C as self-employment income, which is also subject to self-employment tax (15.3%).
What is the $5,250 employer education assistance exclusion?
Under IRC Section 127, employers can provide up to $5,250 per year in tax-free education assistance for tuition, fees, books, and student loan payments. Amounts above $5,250 are taxable as supplemental wages. This limit remains at $5,250 for 2026 and is scheduled to be indexed for inflation starting in 2027.
- Sources: IRS Pub. 970 (scholarship/fellowship taxation, IRC Sec. 117) · IRC Sec. 127 ($5,250 education assistance) · IRS Rev. Proc. 2025-32 · SSA 2026 wage base $184,500.
- 🔄 Last updated July 25, 2026 · Tax year 2026
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