I asked a similar question here and was redirected to this site. I am a postdoctoral trainee (not a student) on a fellowship at a US university. I have no documentation of my fellowship money other than my paystub and a stipend letter. I will receive no tax forms for this, which I verified with my benefits office. They won't otherwise advise me on taxes. My paystub indicates a "Stipend for Health Allowance" and a "Stipend for Living Expenses". All of the former goes to my health insurance and some of the latter as well. My net income is exactly the same as before the fellowship, but 8-10x more money is allocated toward health insurance, again most of it from the "Stipend for Health Allowance". Paying taxes on that former stipend would therefore seem to me to be punitive. Can someone please clarify this situation? Apparently, this is common at my university.
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This is related, does it answer your question? money.stackexchange.com/questions/156116/…– littleadvCommented Apr 3, 2023 at 20:04
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Thanks. It's related, but I am specifically talking about my health insurance amount that is built into my gross pay as I mention, and that is 8x higher (for exactly the same health insurance) as before the fellowship, hence my confusion.– user122431Commented Apr 3, 2023 at 20:13
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Perhaps the health insurance amount isn't taxable? Am I reading this right? irs.gov/businesses/small-businesses-self-employed/…– user122431Commented Apr 3, 2023 at 20:17
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what exactly are you reading there?– littleadvCommented Apr 3, 2023 at 20:20
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2We're speaking in different terms. You're not employed, you're a post-doc fellow. It's a fellowship, not an employment. Your university doesn't pay for your health insurance, it provides stipend to you, and you are the one actually paying for health insurance. I know it may sounds to you like a semantic difference, but it matters.– littleadvCommented Apr 3, 2023 at 21:24
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1 Answer
As covered in this answer, postdoc fellowship grants are taxable income in the US.
My net income is exactly the same as before the fellowship, but 8-10x more money is allocated toward health insurance, again most of it from the "Stipend for Health Allowance". Paying taxes on that former stipend would therefore seem to me to be punitive
Welcome to the US. If you're a US taxpayer, you could deduct health-related expenses on your Form 1040 Schedule A line 1. If you are not a US taxpayer (you're filing 1040NR) then you cannot deduct these expenses.
The income in either way is taxable.
answered Apr 3, 2023 at 20:18
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+1 Thanks. And so that I understand, I can definitely deduct the health-related expense, but is it at all an issue that the amount I'm paying for health insurance according to my paystub as mentioned is much higher than what's on the 1095-C? (I wonder if it's an issue there's no way I have to "prove" my income apart from my paystub and stipend letter.)– user122431Commented Apr 3, 2023 at 21:30
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1@user2561523 is it a deduction on your paystub, and it doesn't match 1095-C? I'd ask your employer and insurer. Commented Apr 3, 2023 at 21:42
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1@user2561523 yup, that matches what the form says: "This line reports the employee required contribution, which is the monthly cost to you for the lowest cost self-only minimum essential coverage providing minimum value that your employer offered you". Since you're not actually employed, you should be able to deduct what you actually paid. Commented Apr 3, 2023 at 23:36
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1Go through the Schedule A instructions: irs.gov/instructions/i1040sca#en_US_2022_publink53061xd0e149 Commented Apr 3, 2023 at 23:41
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1@user2561523 this is schedule A for residents (form 1040), you didn't mention your immigration status, but you said that you can definitely deduct it, so I'm assuming you're a US tax resident. It may not be so if you're on J1 visa. Commented Apr 3, 2023 at 23:43