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    Kshah80's Avatar
    Kshah80 Posts: 2, Reputation: 1
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    #1

    Apr 16, 2012, 01:38 PM
    Tax on stipend
    Hi
    I received 1042 s this year as I started my graduate study. The income code is 15. I am nonresident and I am filling 1040 nr ez. Most of Indian student at my school claim all the tax deductedon their scholarship back based on article 21 (2) of us-India treaty. However when I read that treaty it just says that we are able to claim deductions which USA residents can. The scholarship I mentioned above is not the tuition waiver but stipend.

    Can you guys help me out to decipher this treaty. If it actually does make me exempt from paying tax on my stipend
    AtlantaTaxExpert's Avatar
    AtlantaTaxExpert Posts: 21,836, Reputation: 846
    Senior Tax Expert
    		  
    #2

    Apr 23, 2012, 11:45 AM
    Under Article 21(2), you claim the $5,800 standard deduction.

    Under income code 15, the stipend is coded for fellowship or scholarship and, if the exemption code in Box #6 is 04, is tax-exempt.
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