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What qualifies as a non-taxable scholarship or fellowship for a foreign national?

A scholarship payment received by a candidate for a degree is generally not included as taxable income, under Internal Revenue Code, Section 117 if:

  1. The payment is a qualified scholarship
  2. The recipient is a candidate for a degree, and
  3. The payment is for the purpose of conducting study or research at an educational organization

A scholarship is generally defined as an amount paid or allowed to, or for the benefit of, a student, whether an undergraduate or a graduate, to aid such individual in pursuing his or her studies.

A fellowship grant is generally defined as an amount paid or allowed to, or for the benefit of, an individual to aid him or her in the pursuit of study or research.

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Updated on October 25, 2023

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