Which year do I claim my fellowship in?

cbelinsky · #1 (**permalink**) 03-07-2018, 03:38 PM

Note: I am an international student and receive a yearly 1042-S.

I got a fellowship in November 2017 but my University did not distribute the money until January 2018. Because I am an international student, federal and state taxes were taken out of the fellowship when it was distributed in January 2018.

So:
- My 2017 1098-T includes the fellowship in Box #5.
- My 2018 1042-S will include the fellowship (it was not included in my 2017 1042-S).

I will need to claim a portion of the fellowship as income, do I:
1) Claim the portion in my 2017 taxes to match the 1098-T?
2) Claim the portion in my 2018 taxes to match the 1042-S?
3) Something else altogether?

Many thanks in advance for helping me --
Charlie

Wnhough · #2 (**permalink**) 03-08-2018, 12:48 AM

I will need to claim a portion of the fellowship as income, do I:
1) Claim the portion in my 2017 taxes to match the 1098-T?=======>>You usually need to report the taxable portion of th efellowship on your return when you actually received it.In your case since you received the fellowship January 2018, you need to report it on your 2018 return.

2) Claim the portion in my 2018 taxes to match the 1042-S?=======>>>>>>as mentioned above.
3) Something else altogether?==============>No as said most of taxpayers in US are cash basis method users; In cash accounting, a transaction is recorded when money actually changes hands.Income is recorded when you actually receive the money

cbelinsky · #3 (**permalink**) 03-08-2018, 12:44 PM

Thank you Wnhough!

Your the first person to give me an answer with an explanation that makes sense -- and I have talked with numerous people about this.

Just as an addendum: the payroll office at my University said the IRS is changing the rules about how Universities report information on a 1098-T. In the future (not sure which year), Universities will be reporting on the 1098-T when money is dispersed to the student, not just when money is collected by the University. That change would have made the reporting much clearer to me.

Wnhough · #4 (**permalink**) 03-09-2018, 01:56 AM

Quote:

Originally Posted by cbelinsky

Thank you Wnhough!

Your the first person to give me an answer with an explanation that makes sense -- and I have talked with numerous people about this.

Just as an addendum: the payroll office at my University said the IRS is changing the rules about how Universities report information on a 1098-T. In the future (not sure which year), Universities will be reporting on the 1098-T when money is dispersed to the student, not just when money is collected by the University. That change would have made the reporting much clearer to me.

I see; however as said aslong as you report taxable income, portion of th efellowhsip , in your case , when you actually receive it, then there won't be no problem with IRS/your home state at all.