T32 taxability

[Leslie]

I know that the stipend itself for a trainee on a T32 is considered "taxable income", but does anyone know about the taxability of the tuition costs covered by the grant?  Is that considered taxable income?

[march016]

I don't know the answer to this off the top of my head Leslie but I will see what I can find out.  Does anyone else have any experience with this?

[Leslie]

The reason I am asking is that a pre-doc trainee on a T32 got dinged from the State of MN Revenue service because the U considered the $6,000 of tuition costs as "income" on their 1099-T form they received.  Not sure if the U is incorrect in this or not.  But it would be a big deal if these trainees need to consider the tuition benefit received as taxable income.

[Sarah]

Hi Leslie,

I've always found the attached sheet helpful.  It deals with multiple classifications of recipients as they are not all treated the same.  Postdocs, trainees not admitted to programs, etc are treated differently from predocs matriculated in a graduate program.

Hope this helps.

SAS

[Seth Goldberg]

Minnesota treats it funny, at some point last year all of the employer paid tuition benefit for employees was taxable in the state, when even the Feds let you deduct the first $5,250, although I think this was fixed.

I'm not sure if this is your specific case but although it isn't taken into account for actual income tax purposes, Minnesota definitely adds in tuition and fees as the "nontaxable income" line when it comes to applying for the renters/property tax refund to up your adjusted gross. It was the only time I saw it but I use to have grad students and post docs complain about come tax time when I did payroll, although that was 10 years ago.

http://www.revenue.state.mn.us/Forms_and_Instructions/m1pr_inst_14.pdf  Page 8 lists the nontaxable income. It's all types of tuition, employer paid, waived and scholarship.