Stipends are sometimes reported on a 1099, but not always. Whether you get a 1099 depends on how the payer classifies the payment. If you were paid $600 or more as an independent contractor, expect a Form 1099-NEC. If the payer treats you as an employee, the stipend goes on a W-2 instead. Scholarship and fellowship stipends paid by a university often appear only on a Form 1098-T, and many non-compensatory fellowships generate no tax form at all. Nonresident aliens receive a different form entirely, Form 1042-S. In every case, the taxable portion of the stipend must be reported on your federal return, regardless of whether any form arrives.
When a Stipend Is Reported on Form 1099-NEC
You will receive a Form 1099-NEC if the payer treats you as an independent contractor rather than an employee and pays you $600 or more during the year for services.1Internal Revenue Service. About Form 1099-NEC, Nonemployee Compensation This is common for visiting scholars delivering a specific project, independent research fellows working under a grant with milestones, and consultants hired on fixed-term contracts. The classification hinges on how much control the payer has over when and how you do the work. Less control points toward independent contractor status and a 1099.
A 1099-NEC means no taxes were withheld. You owe regular income tax and self-employment tax on the net earnings. The self-employment tax rate is 15.3%, covering Social Security (12.4%) and Medicare (2.9%).2Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) You can deduct the employer-equivalent half when calculating adjusted gross income, but the upfront liability still catches many first-time recipients off guard.
Payers generally issue the 1099-NEC to individuals, partnerships, and estates. Payments to C corporations and S corporations usually do not require the form, with limited exceptions for attorney fees and federal agency vendor payments.3Internal Revenue Service. Instructions for Forms 1099-MISC and 1099-NEC If your payment fell below $600 for the year, the payer may not issue any form. The income is still fully taxable.
The 1099-MISC Edge Case
A smaller category of stipend-like payments lands on Form 1099-MISC instead. This form covers certain payments that are not compensation for services, such as prizes, awards, and other miscellaneous income of $600 or more.4Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information A research prize or honorarium you did not have to earn through services might appear here. The practical difference: 1099-MISC income that does not come from a trade or business goes on your return as other income rather than on Schedule C, and it may not trigger self-employment tax.
When a Stipend Goes on a W-2 Instead
When a payer controls your schedule, assigns specific tasks, and directs how you perform the work, you are an employee, and your stipend is reported on Form W-2. This is the norm for teaching assistants, research assistants, and medical residents whose work is part of the institution’s operations. The payment shows up in Box 1 of the W-2 alongside any other wages you earned.
W-2 reporting is simpler because the employer withholds federal income tax, any state income tax, and your share of FICA before the money reaches you. Those withheld amounts are credited against your total tax liability at filing, so you are far less likely to face an unexpected bill or an underpayment penalty. One wrinkle: students who work for the same university where they are enrolled and attending classes may be exempt from FICA on those wages under a special student-employee rule. The exemption does not apply to postdoctoral researchers, medical residents, or fellows whose primary role is professional rather than educational.
When Only a 1098-T Arrives
Universities file Form 1098-T for enrolled students to report tuition billed and scholarships or grants received. Box 1 shows the qualified tuition and related expenses the school billed you. Box 5 shows the total scholarships and grants credited to your account during the year.5Internal Revenue Service. About Form 1098-T, Tuition Statement The 1098-T is informational. It does not itself report taxable income; it helps you calculate how much of your scholarship exceeded your qualified expenses.
If Box 5 is larger than Box 1, the difference is a starting point for figuring the taxable portion of your stipend. The actual number can be higher or lower depending on additional qualified expenses not captured on the form, such as required textbooks.
When No Tax Form Arrives at All
Many non-compensatory stipends and fellowships generate no information return. If your university simply deposited a fellowship into your account without requiring services, or the payment fell below a 1099 threshold, or the institution classified the payment as a scholarship, you may never receive a W-2, a 1099, or a 1098-T reflecting the full amount.
You still owe tax on the taxable portion. The IRS is explicit: you must report the taxable amount of a scholarship or fellowship whether or not you received a form.6Internal Revenue Service. Publication 970 Tax Benefits for Education If the taxable amount was not reported to you in Box 1 of a W-2, enter it on Schedule 1 (Form 1040), line 8r.7Internal Revenue Service. Topic No. 421 Scholarships, Fellowship Grants, and Other Grants
A fellowship becomes taxable in two situations. Any portion that compensates you for teaching, research, or other services is fully taxable as income. And even a purely non-compensatory fellowship is taxable to the extent you spend it on anything other than qualified education expenses like tuition, required fees, and required books and equipment.7Internal Revenue Service. Topic No. 421 Scholarships, Fellowship Grants, and Other Grants Money you put toward rent, groceries, health insurance, travel, or optional equipment counts as taxable income. If your university provides a $35,000 fellowship and your tuition is $20,000, at least $15,000 is taxable.8Internal Revenue Service. Taxation of Scholarships, Fellowships, and Grants Graduate students living on stipends are often surprised by the tax bill because nothing on their paycheck or award letter signaled that withholding was their responsibility.
Nonresident Aliens Receive Form 1042-S
If you are a nonresident alien receiving a stipend from a U.S. source, the paying institution files Form 1042-S to report the income and any tax withheld, not a 1099.9Internal Revenue Service. Federal Income Tax Withholding and Reporting on Other Kinds of U.S. Source Income Paid to Nonresident Aliens The payer must file a 1042-S even if the entire payment is exempt under a tax treaty.
The default federal withholding rate on scholarship or fellowship income paid to nonresident aliens is 14% for individuals present in the U.S. on F, J, M, or Q visas when the payment is tied to study, training, or research. For other nonresidents, the rate is 30%.10Office of the Law Revision Counsel. 26 USC 1441 – Withholding of Tax on Nonresident Aliens Many countries have tax treaties with the United States that reduce or eliminate this withholding. To claim a treaty exemption, submit Form W-8 BEN to the withholding agent and include your taxpayer identification number. A W-8 BEN without a TIN cannot be accepted for treaty purposes.11Internal Revenue Service. Claiming Treaty Exemption for a Scholarship or Fellowship Grant Most treaty articles carry time limits, so check the specific treaty with your home country.
Where Each Form Goes on Your Return
The right line depends on which form you received and the nature of the income.
- W-2 income: report the amount from Box 1 on line 1a of Form 1040, alongside any other wages. Withheld taxes are credited against what you owe.
- 1099-NEC for a trade or business: report the income on Schedule C, where you can deduct legitimate business expenses. The net profit flows to your 1040 and to Schedule SE for self-employment tax.12Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship)
- Non-compensatory fellowship, whether reported on a 1098-T or on no form at all: report the taxable amount on Schedule 1, line 8r. This income is not subject to self-employment tax because it is not payment for services.6Internal Revenue Service. Publication 970 Tax Benefits for Education
- 1042-S for nonresident aliens: report taxable scholarship amounts on Schedule 1, line 8r when filing Form 1040-NR. Any tax withheld by the payer is credited on your return.13Internal Revenue Service. Instructions for Form 1042-S (2026)
Paying Tax When Nothing Was Withheld
If your stipend arrives without any withholding, whether on a 1099-NEC or on no form at all, you are responsible for paying tax throughout the year rather than at filing. The IRS expects quarterly estimated payments using Form 1040-ES. For the 2026 tax year, the due dates are April 15, June 15, and September 15 of 2026, and January 15, 2027.14Internal Revenue Service. 2026 Form 1040-ES Estimated Tax for Individuals You can skip the January payment if you file your return and pay the full balance by February 1, 2027.
The IRS generally waives the underpayment penalty if your total balance due is less than $1,000. Beyond that, you are safe if your payments and withholding cover at least 90% of what you owe for the current year, or 100% of your prior year’s tax liability. If your adjusted gross income exceeded $150,000 in the prior year ($75,000 if married filing separately), the prior-year threshold rises to 110%.15Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty First-year graduate students with little income the year before often find the 100% prior-year safe harbor easiest to hit because prior tax liability was small.
The penalty is calculated as interest on the underpaid amount for each quarter, not a flat percentage. It is modest compared to the tax itself but compounds every quarter you miss, and the IRS assesses it automatically when you file. Setting aside roughly 25% to 30% of each stipend payment in a separate account keeps you ahead if your income comes entirely from 1099 or fellowship sources.
Records to Keep
The IRS can generally audit a return within three years of the filing date. If you underreport your income by more than 25%, that window extends to six years. Fraudulent returns have no time limit.16Internal Revenue Service. Time IRS Can Assess Tax
Keep your award letter or grant agreement, any 1099s, W-2s, 1098-Ts, or 1042-S forms you receive, tuition bills and receipts, proof of required book and equipment purchases, and records of any estimated tax payments. If you claimed Schedule C deductions, hold onto receipts for every expense. Fellowship recipients who received no tax form should save the award letter and any correspondence from the institution confirming the amount and purpose of the payment. That documentation is your primary defense in an audit.