Which tax year is used for spring stipends?
Date: March 2018
I receive a graduate fellowship and due to the way Cornell prepares the 1098-T form, I am unsure how to report it. On the 1098-T, both the Fall 2017 and Spring 2018 stipend payments are added to the 2017 year. The Spring stipend payment was noted on my bursar on 12/15 (when tuition was noted), however the disbursements were not paid out until mid-January. I would like to make sure all of my information is accurate. Can you please clarify which tax year the Spring 2018 stipend applies to when reporting taxes?
I’ve already contacted the bursar office and the only response that I received was that they are not allowed to give out tax advice (which is not the same thing as what I am asking).
Tax law treats fellowships and scholarships differently than wage or salary earnings, although both may be considered taxable income. Please refer to IRS Publication 970 “Tax Benefits for Education” for guidance for the determination. When a student has an hourly job or holds an assistantship (TA, RA, GRA, or GA) at Cornell the payroll office will generate a W-2 form that summarizes all earnings for the calendar year. Fellowships and scholarships are not reported on W-2 forms, but are instead reported on the form 1098-T that you received from the bursar’s office.
You are correct that fellowship stipends for the Spring 2018 semester typically will appear on the 2017 1098-T form that you recently received because they are credited to your account at the time the bill is generated in December 2017. While this may not be intuitive, it is technically correct.
The 1098-T form is informational. Your tax preparer may request additional documentation, such as your bursar statement, as verification of the fellowship/scholarship/stipend that was received for a given year.
You’ll find more information from the Graduate School, the university, and the IRS here:
- Understanding the 1098-T Form – from the Graduate School
- Form 1098-T – from the University Division of Financial Affairs
- Instructions for Forms 1098-E and 1098-T (2018) – from the IRS
- Tax Benefits for Education – from the IRS
I have been in discussions with representatives from the bursar’s office and Cornell’s tax office. We are working to ensure that staff are aware of this frequent fellowship question and can respond to future requests with some additional information.
Associate Dean for Administration