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This a hugely helpful site, and I did my best to research my question before asking it, but my situation seems to be a bit too specific.

My wife is a full-time PhD student at a Canadian university where she received a scholarship of ca. $20,000 in 2018. However, since she is at the dissertation writing stage, she doesn't need to be physically in Canada and moved to the US with me in 2017, so we are both resident aliens of the United States for tax purposes (I'm on H1B and she's on H4). Do we need to indicate her scholarship as taxable income? Thank you very much!

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This question, the first question that shows up in related questions appears to offer a very well researched answer to your question. It states that no it isn't taxable income, but the proper forms need to be filed.

In trying to verify if that advice is still up to date, I read through the instructions for form 8833, and I must wholeheartedly agree with the recommendation in the answer to the linked question to hire professional advice from someone experienced in this area. Form 8833 offers no clear information for how to fill it out correctly without expert knowledge and shows clear penalties for failing to fill it out.

Also, it depends on your specific situation. Is the tuition higher than the scholarship amount or is there a stipend involved? It may even depend on exactly how the scholarship is structured.

Edit: Now I see that your wife moved to the US with you in 2017. You may need to file an amended return for 2017 to avoid any issues with failing to file form 8833 for that year.

  • Thank you very much for such a detailed answer. Perhaps, you are right, and we'll end up hiring professional advice. – Alexey Golubev Jan 27 at 16:03

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