Are Science Research Experience for Undergraduates (REUs) stipend checks taxable?

Question

I get offered a stipend check from a University in which I am learning how to do research. Should there be taxes taken out of it or paid next tax season?

Answer 1

There will be no taxes taken out of your stipend.  Since it is not considered payment for services rendered, no payroll taxes (Social Security or Medicare) will be paid on the stipend.  Your stipend is not considered earned income.

From your stipend, to determine any taxable amount,  subtract all expenses related to the REU.  For example, your food, travel, incidental expenses, books, equipment.  It is unlikely that there would be any amount left.  Since you are required to live at the research institution, any housing provided to you is tax-free.  If there is a separate travel allowance, that would be tax-free.

Once you subtract all your living expenses from the stipend, it is unlikely that there would be anything left to tax.  If there is anything left, you would put that amount on Line 7 of Form 1040 with the notation SCH to the left of the total in Line 7.

Short answer:  No tax document will be issued, and most likely no income will be reportable as taxable.

Answer 2

Sorry to tell you but yes they are generally taxable.

Hope this helps.