Getting a stipend comes down to four steps: find a program that funds people in your situation, meet its eligibility rules, submit a competitive application, and then handle the taxes correctly once payments start. Stipends are fixed payments that support training, education, or research rather than pay for hours worked, and they reach graduate students, postdocs, fellows, and interns through universities, federal agencies, foundations, and private employers.
Where the Money Comes From
Universities are the most common source. Departments fund teaching and research assistantships that pay a stipend in exchange for work supporting the school’s academic mission, and these positions often come bundled with tuition waivers and health insurance. That bundle is usually the most valuable form of stipend support a graduate student can find.
Federal agencies fund a large share of research stipends through grants to institutions, which then pay individual recipients. The National Institutes of Health sets standardized levels for its National Research Service Awards, starting at $28,788 a year for predoctoral trainees and running up to $75,564 for senior postdocs.1NIAID. Salary Cap, Stipends, and Training Funds The National Science Foundation, Department of Energy, and Department of Defense run their own fellowship programs with separate pay scales.
Non-profit foundations fund fellowships tied to their missions, from biomedical research to the arts. Private corporations run stipend-backed internships and residencies, mostly in technical fields where they want to build a pipeline of future hires.
Who Qualifies
Requirements depend on the awarding organization, but a few baseline expectations show up almost everywhere. Academic stipends generally require enrollment at least half-time in a degree-granting program at an accredited institution, and recipients must maintain satisfactory academic progress throughout the award.2Federal Student Aid. Eligibility Requirements Many programs set a minimum GPA. Some restrict funding to a particular stage, such as doctoral candidates who have advanced to the dissertation phase.
Financial need sometimes factors in, particularly for programs designed to broaden participation in a field. Applicants may need to document income or membership in groups the awarding body considers underrepresented. Professional fellowships may require active membership in an industry association. These filters exist because stipend budgets are finite, and the organizations behind them want the money to reach people who fit their goals.
Stipend or Wage?
This distinction matters more than most recipients realize. A wage compensates an employee for hours worked and must comply with minimum wage and overtime rules. A stipend is a fixed payment to a program participant, not tied to hourly output, and is generally exempt from those requirements. If the primary purpose of your activity is your own education or training, you’re likely receiving a stipend. If you’re primarily producing value for the organization the way a regular employee would, the payment should probably be classified as wages regardless of what the organization calls it.
How to Apply
Start by gathering academic transcripts from every institution you’ve attended. Update your CV to include research experience, publications, and professional affiliations. Most competitive awards ask for letters of recommendation from faculty who can speak to your qualifications. Fellowship and grant applications also typically require a research proposal outlining scope, methods, and expected outcomes within a defined timeline.
Application portals will ask for your Social Security number, residential address, and institutional ID. Make sure dates and details on your CV match what you enter in the form. File uploads usually need to be PDF format with specific size limits, so convert and compress documents before you start.
Most applications go through a digital portal with a review screen before final submission. Use it. Once you submit, you should get an automated confirmation email. Some programs still require physical copies sent by certified mail, so read the instructions carefully.
Review committees score submissions against internal rubrics after the window closes. Expect to wait six to twelve weeks for a decision, sometimes longer for large federal programs. Notification comes through the portal or by formal letter, and you’ll have a set period to accept the offer and return any paperwork.
What You’ll Owe in Taxes
Stipend taxation trips up more recipients than almost any other aspect of these payments. The core federal rule lives in Section 117 of the Internal Revenue Code, which draws a line between money used for qualifying educational costs and money used for everything else.3Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships
If you’re pursuing a degree at an eligible institution, money spent on tuition, enrollment fees, and books or supplies required for your courses is excluded from your gross income.3Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships Everything else counts as taxable income and must be reported on your federal return. That includes money you spend on rent, food, transportation, or personal expenses. If your program provides a tuition waiver separately and your entire stipend goes toward living costs, the full stipend is taxable.
The Service Condition
Section 117(c) says that any portion of a scholarship or fellowship representing payment for teaching, research, or other services required as a condition of the award does not qualify for the tax exclusion.4Office of the Law Revision Counsel. 26 USC 117 – Qualified Scholarships If your funding letter requires you to serve as a teaching assistant or work in a lab to keep the stipend, the IRS treats that payment as compensation for services. It’s taxable regardless of whether you spend it on tuition.5Internal Revenue Service. Topic No. 421, Scholarships, Fellowship Grants, and Other Grants Narrow exceptions exist for the National Health Service Corps Scholarship Program and the Armed Forces Health Professions program, but most graduate assistantships don’t qualify.
A pure fellowship that funds your research without requiring services in return gets better tax treatment, because the tuition-and-fees exclusion applies normally. The practical difference between a fellowship and an assistantship can save thousands of dollars a year.
Reporting the Income
Institutions may issue a Form 1098-T showing tuition amounts, but many stipend payments don’t appear on any tax form at all. You’re still responsible for reporting the taxable portion.6Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education If your taxable stipend wasn’t reported on a W-2, put it on Schedule 1 (Form 1040), line 8r. That amount flows to Form 1040, line 8 as other income.7Internal Revenue Service. Instructions for Form 1040 (2025)
Calculate the taxable portion by subtracting your qualified educational expenses (tuition and required course materials) from the total you received. Keep detailed receipts. If you’re audited, the burden falls on you to show which dollars went to qualifying expenses.
Paying Quarterly
Most stipend payers don’t withhold income tax, which means you manage your own tax obligation through the year. If you expect to owe at least $1,000 in federal tax after accounting for any withholding and refundable credits, you need to make estimated quarterly payments on Form 1040-ES.8Internal Revenue Service. 2026 Form 1040-ES Estimated Tax for Individuals Payments are due in April, June, September, and the following January.
To avoid underpayment penalties, pay either 90% of your current-year tax liability or 100% of what you owed the prior year, whichever is less. If your adjusted gross income exceeded $150,000 last year ($75,000 if married filing separately), that prior-year threshold rises to 110%.9Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty For graduate students in their first year of receiving a stipend with no prior tax liability, this is less of a concern, but quarterly payments still help you avoid a surprise bill in April.
Social Security, Medicare, and Retirement
Whether your stipend is subject to Social Security and Medicare taxes depends on your relationship with the institution paying you. If you work for the same school where you’re enrolled at least half-time, and the work is part of your educational program, the student FICA exception under Section 3121(b)(10) exempts those payments from Social Security and Medicare withholding.10Internal Revenue Service. Student FICA Exception That rule covers most graduate teaching and research assistants.
The exception vanishes if you’re classified as a professional employee, meaning you’re eligible for benefits like retirement plan contributions, paid vacation, or sick leave beyond what’s offered through your student role. It also doesn’t apply to work performed for an employer other than the school where you’re enrolled. Pure fellowship income involving no services isn’t wage income at all, so it doesn’t trigger FICA.
The downside of FICA exemption is real. Those years don’t count toward Social Security credits, so a graduate student who spends six years on a stipend without other qualifying employment will have six years of zero earnings in their Social Security record, which reduces future benefits.
On the retirement savings side, taxable fellowship and stipend income that isn’t reported on a W-2 counts as compensation for IRA contribution purposes for tax years beginning after 2019.6Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education Before that change, many stipend recipients had no qualifying compensation and couldn’t contribute to an IRA at all. You can now contribute up to $7,500 for 2026 to a traditional or Roth IRA, as long as your taxable stipend income is at least that amount.11Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 If you’re 50 or older, you can add another $1,100 in catch-up contributions.
If You’re an International Recipient
If you’re a nonresident alien receiving a stipend in the United States, the tax treatment differs significantly from what domestic recipients face. The default federal withholding rate on taxable scholarship and fellowship payments to nonresident aliens is 30%. That rate drops to 14% if you hold an F, J, M, or Q visa and the payment is connected to a qualified scholarship.12Internal Revenue Service. Withholding Federal Income Tax on Scholarships, Fellowships and Grants Paid to Nonresident Aliens Tax treaties between the U.S. and your home country may reduce the rate further or eliminate it.
Unlike domestic recipients who typically see no withholding, international recipients usually have taxes taken out at the source. Your institution should provide Form 1042-S by March 15 of the year following payment, showing amounts paid and taxes withheld.13Internal Revenue Service. Instructions for Form 1042-S (2026) You’ll use this form when filing on Form 1040-NR.
International students on F-1, J-1, or M-1 visas who have been in the U.S. for fewer than five calendar years are generally exempt from Social Security and Medicare taxes on wages connected to their student status.14Internal Revenue Service. Foreign Student Liability for Social Security and Medicare Taxes After five years, you may become a resident alien for tax purposes under the substantial presence test, and the exemption ends unless you qualify for the student FICA exception through your school employment.