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Is a taxable student fellowship/stipend "earned income" for the purpose of the Earned Income Tax credit? It seems more like the examples of earned income than the examples of not-earned income listed here, but I'm not sure. The fellowship/stipend income is definitely taxable (confirmed by my school) because receipt of the stipend was conditioned on my completing services (the University paid me a few thousand $ to do an otherwise unpaid public interest internship for a non-university business over the summer)... but they don't generate any tax documentation like a W-2 for it. This was my only major taxable income in 2010 and I'm below the threshold to require filing. But my understanding is that if I get the earned income tax credit, I'd get a refund. Also, if I do file, should I be concerned about reporting this income without any documentation (since, again, they don't give W-2's for this... and it's not self-employment, right?) and then claiming a tax credit based on it? Should I include a printout of the direct deposit record, or copy of an email from the school notifying me of when the stipend was paid, or something?
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Mar 31, 2011 16:10
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Zeta Taskforce posted:I'd like to hear other people's interpretation, but to me this almost sounds like self employment. You performed services in exchange for money. Except it just seems weird. Did you have to do this work as a requirement for your degree, or was this an extra side project you picked up to make some extra money? Either way, they should have issued a tax document that would have clarified the nature of the money. Before I posted here, I asked the Financial Aid office whether I was supposed to have received a W-2, and they said no, they don't issue any sort of tax documentation for it, but it nevertheless needs to be reported as taxable income. I then addressed my question to payroll, who I'm waiting to hear back from. I did a similar program in the summer of 2009, and they issued a W-2 for that, so I don't know what the hell. I think the weirdness may be due to them not wanting to classify it as financial aid/work study for some administrative reason. If payroll doesn't get back to me with actual info I'll just not file... worst case scenario, I unnecessarily missed out on a measly refund. edit: This page is where I got the idea that it was a taxable scholarship or fellowship, rather than self-employment income. The taxable scholarship/fellowship section mentions specifically that it should be reported as income even if you don't receive a W-2. intensive purposes fucked around with this message at 08:54 on Apr 3, 2011 |
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Apr 3, 2011 08:38
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The school paid me directly. I was an intern attorney at a public defender's office, had a supervisor and assigned caseload and office and everything just like the regular attorneys. No money or anything from the PD office, they just verified to my school that they agreed to have me work at least 10 weeks. I didn't have to report hours to my school, and neither did the office. I'm not worried about being "hit" with a self-employment tax, because like I said, this was my only income for the year. The standard deduction is greater than my income, so I wouldn't owe anything anyway. edit: to be clear, in the eyes of the office, I was doing an unpaid internship. That's how I would describe the experience to anyone who sees it on my resume. The stipend from my school is just a little carrot they give so that people who do public interest law won't be homeless for the summer since most public interest internships are unpaid. This helps keep the school's summer employment numbers up, helps them be able to say they support public interest, etc. intensive purposes fucked around with this message at 17:03 on Apr 4, 2011 |
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Apr 4, 2011 16:52
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Zeta Taskforce posted:You will still have to pay self-employment tax, even if your income tax is zero. Your standard deduction and personal exemption are not used to reduce your income for calculating self-employment. I didn't ask about the other EITC requirements because I know that I meet them, but thanks for the concern. The the only requirement that I was unsure of was whether it was earned income.
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Apr 4, 2011 19:33
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Zeta Taskforce posted:I was goggleing a bit more, and found this. If it is considered a scholarship, it does not count as earned income toward the EITC. I bugged my school again and they flat out said they CANNOT tell me if it is self-employment income or something else. It's pretty ridiculous that they don't even know what they gave me. I'll keep bugging payroll instead of the idiots at the law school.
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Apr 4, 2011 20:09
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