Because stipends are awards and not wages for services, Social Security and Medicare taxes are not withheld. Stipends are still considered taxable income, though. ... Employers aren't required to withhold taxes on a stipend, so you should maintain records of what you receive throughout the year.

Are stipends supposed to be taxed?

Stipend checks aren't considered wages so you won't pay Social Security or Medicare taxes on them. But they still count as taxable income when it comes to your income taxes. Here's the catch: your employer won't withhold any income taxes from that stipend check.

Is stipend exempt from income tax?

As per the Income Tax Act, stipend is a scholarship given to meet the education expenses. Thus, it is exempted from income tax under Section 10 (16).