Yes, fellowships are usually paid. Most come with a stipend meant to cover living costs while you study or research, and the amount ranges from a few thousand dollars for a summer undergraduate award to more than $75,000 a year for a senior postdoctoral position. What you keep depends on how the IRS classifies each piece of the award, and fellowship recipients often have to calculate and remit their own taxes because nothing is withheld.
Stipend, Not Salary
A fellowship stipend is a fixed sum intended to cover rent, food, transportation, and other basic living costs while you focus on academic or professional development. It is not compensation for producing goods or services for the sponsoring organization, which is why fellowships are structured differently from standard employment.
Many fellowships bundle additional support on top of the cash stipend. Tuition remission cancels the cost of graduate coursework. Some programs cover health insurance premiums. Supplemental funding for research travel, conferences, or professional development is common, with individual travel grants typically running $1,000 to $5,000 depending on the program. The NIH offers up to $3,000 per budget period for childcare costs for fellows with dependent children under age 13.1NATIONAL INSTITUTES OF HEALTH (NIH). Childcare Costs for Ruth L. Kirschstein National Research Service Award (NRSA) Individual Fellows and Institutional Research Training Awards
One detail catches many fellows off guard. Health insurance paid by your institution is generally not treated as a qualified education expense for tax purposes, because most universities do not require every student to buy the school’s specific plan. The value of that coverage may count as taxable income even though it never lands in your bank account.
How Much Do Fellowships Pay?
Amounts vary widely by academic level, field, and location. Undergraduate summer awards may offer a few thousand dollars. Postdoctoral fellowships routinely provide a full year’s living support. Fields with strong private-sector demand, such as engineering, computer science, and biomedical research, tend to pay more than the humanities.
The NIH’s National Research Service Award program is a widely used benchmark. Recently published NRSA stipend levels are:
- Predoctoral: $28,788 per year
- Postdoctoral, year 0: $62,232 per year
- Postdoctoral, year 3: $65,640 per year
- Postdoctoral, year 7 or more: $75,564 per year
These figures are adjusted periodically to reflect changes in the cost of living, as required by federal law.2NIAID. Salary Cap, Stipends, and Training Funds Many universities peg their own minimum postdoctoral stipends to the NIH scale or set them slightly higher. Geography plays a role too: a fellowship in a major metropolitan area will generally offer a higher dollar amount than one in a lower-cost region.
How the Money Reaches You
Payment mechanics depend on your institution’s administrative setup. Some programs route stipends through payroll, which means taxes may be withheld automatically and you will get a Form W-2. Others process payments through accounts payable or credit your student account directly, applying funds to tuition and fees first and disbursing any balance to you.
Most fellowships pay in monthly installments, though some issue lump sums at the start of each semester. The schedule matters for tax planning. If you receive several months of income in a single payment, you may need to set aside a larger portion right away to cover the eventual tax bill.
Which Part of a Stipend Is Taxable
Federal law excludes a qualified scholarship from gross income when two conditions are met: you are a candidate for a degree at an eligible educational institution, and the funds are used for qualified tuition and related expenses.3Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships Qualified expenses include tuition, required enrollment fees, and books, supplies, or equipment that your program requires of all students in your course of instruction.4Internal Revenue Service. Publication 970, Tax Benefits for Education
Everything else is taxable. Fellowship funds used for room and board, travel, personal equipment, or research costs that are not required of all students in your program must be reported as income. If you receive a $30,000 stipend and $10,000 goes toward qualifying tuition, the remaining $20,000 is taxable income you must report on your federal return.4Internal Revenue Service. Publication 970, Tax Benefits for Education
A laptop qualifies only if it is required equipment for your program and required of every student in your course of instruction. If it is merely helpful or recommended, it does not qualify.4Internal Revenue Service. Publication 970, Tax Benefits for Education
Postdocs and Other Non-Degree Fellows
If you are not a candidate for a degree, the entire stipend is generally taxable. The tax-free exclusion applies only while you are pursuing a degree.3Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships This is one of the most commonly overlooked rules in fellowship taxation and can produce an unexpectedly large tax bill for new postdocs.
Pay for Teaching or Research Services
Even for degree candidates, any portion of a fellowship that represents payment for teaching, research, or other services you are required to perform as a condition of the award is taxable.3Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships If the grant requires you to teach or assist with research, that portion is treated as wages.
FICA and Self-Employment Tax
A pure fellowship stipend that does not represent payment for services is not treated as wages, so it is generally not subject to Social Security or Medicare (FICA) taxes. FICA totals 7.65% of wages for employees, so being outside the FICA system can save a fellow thousands of dollars a year.
When a fellowship does require you to work and the institution classifies you as an employee, your pay is subject to FICA withholding. Students who work for the school, college, or university where they are enrolled may still qualify for the student FICA exception, which waives Social Security and Medicare taxes as long as education rather than employment is the primary purpose of the relationship.5Internal Revenue Service. Student Exception to FICA Tax
If a portion of your fellowship compensates you as an independent contractor rather than an employee, that amount may be subject to self-employment tax. This is uncommon in typical academic fellowships but can arise when a fellow performs services outside the scope of a standard training grant.
Reporting the Income and Paying Estimated Taxes
Your institution may never send you a Form W-2 or any other tax document for your fellowship. The IRS still requires you to report the taxable portion, and the burden of figuring out the correct amount falls on you.4Internal Revenue Service. Publication 970, Tax Benefits for Education Keep detailed records of every disbursement and every qualified expense throughout the year.
If taxable fellowship income was reported on a W-2, include it on Form 1040, line 1a. If it was not reported on a W-2, which is the more common scenario, report it on Schedule 1 (Form 1040), line 8r.4Internal Revenue Service. Publication 970, Tax Benefits for Education
Quarterly Deadlines
Because most fellowship stipends have no tax withheld, you will likely need to make quarterly estimated tax payments. This is required if you expect to owe $1,000 or more in federal tax for the year after subtracting any withholding and refundable credits.6IRS. Form 1040-ES – 2026 – Estimated Tax for Individuals Missing or underpaying can trigger penalties.
The quarterly deadlines are:
- Income from January 1 through March 31: due April 15
- Income from April 1 through May 31: due June 15
- Income from June 1 through August 31: due September 15
- Income from September 1 through December 31: due January 15 of the following year
If a due date falls on a weekend or federal holiday, the deadline shifts to the next business day.7Internal Revenue Service. Estimated Tax Payments can go through IRS Direct Pay, the Electronic Federal Tax Payment System (EFTPS), or by mailing a check with a Form 1040-ES voucher.
Most states with an income tax treat taxable fellowship income the same way the federal government does. Rates vary from zero in states without an income tax to over 10% at the top end. State estimated-payment schedules do not always match the federal calendar, so check with your state tax agency.
International Fellows
Non-resident aliens who receive taxable fellowship income from U.S. sources face mandatory withholding. The standard rate is 30%, but fellows temporarily in the United States on an F, J, M, or Q visa may qualify for a reduced rate of 14% on the taxable portion.8Internal Revenue Service. Withholding Federal Income Tax on Scholarships, Fellowships and Grants Paid to Nonresident Aliens A tax treaty with your home country may allow an even lower rate or a full exemption on part of the income.
Amounts used for qualified tuition and related expenses remain tax-free under the same rules that apply to U.S. citizens and residents. Withholding applies only to the taxable portion. Fellowship income that constitutes payment for services is subject to graduated withholding at regular income tax rates rather than the flat 14% or 30%.8Internal Revenue Service. Withholding Federal Income Tax on Scholarships, Fellowships and Grants Paid to Nonresident Aliens
Saving for Retirement on a Stipend
Before 2020, many fellowship recipients could not contribute to an Individual Retirement Account because their stipend did not count as compensation. A change in the rules now treats taxable, non-W-2 fellowship and stipend payments as compensation for IRA purposes. If your fellowship stipend is included in your gross income, even without a W-2, you can contribute to a traditional or Roth IRA based on that income.4Internal Revenue Service. Publication 970, Tax Benefits for Education Your contribution limit is the lesser of your taxable fellowship income or the annual IRA cap.
What Happens When the Fellowship Ends
Fellowship recipients who were not classified as employees during their award, meaning they received stipend payments without a W-2, are generally not eligible for unemployment insurance benefits after the fellowship ends. Unemployment eligibility depends on having been a W-2 employee, and many fellowship structures specifically classify recipients as trainees. If your institution did process your stipend through payroll and issue a W-2, you may have a stronger basis for a claim, but outcomes vary by state.
Because fellowships usually come without employer-sponsored retirement plans or other standard benefits, building a personal safety net during the award matters. Using the newly available IRA option, keeping an emergency fund, and staying on top of quarterly estimated taxes can prevent the most common financial surprises both during the fellowship and after it ends.