A stipend does not count as wages earned, so no Social Security or Medicare taxes get withheld. This means your employer will not withhold any taxes for you. However, a stipend does count as taxable income, so you will need to plan to set aside money for the taxes you will owe on your stipend at the end of the year.

How are stipends reported to the IRS?

The IRS explains that your stipend may be reported on Form W-2 or Form 1099-MISC. ... On the other hand, many students receive stipends to help pay tuition and other educational expenses. Generally, this type of stipend would be reported on Form 1098-T, Box 5 as a scholarship or fellowship.

Do stipends get a 1099?

If box 7 reports the stipend, you would have to report it as self-employed income, then enter the same amount as your "business" expense. This will ensure that form 1099-MISC is reported for matching purposes, but the amount is not taxable as self-employment income.