My wife and I are Indian citizens filing jointly as residents for tax purposes. My wife was a student pursuing PhD in Spring 2010. She received around $8000 as taxable fellowship, of which $1,300 was deducted as non-resident taxes. She also paid around $1200 as tuition fees for that semester. She received a w-2 (which does not report the scholarship) from her new employer and has not received the 1098-T as she is a non-resident alien.

The questions I had were:

1. Can I use the tuition deduction?

2. How and where do I report the scholarship and the tax paid?

3. Should I deduct the tax and tuition paid from the scholarship before I add to wages on W-2?

Tuition and fee deduction benefit is not available in 2010 even for residents.

Thanks MukatA!

How do I report my wife's taxable fellowship? Should I add it to the wages after subtracting the tax and tuition I paid or should I add the taxes on the fellowship to the federal taxes in the end?