Would FICA be owed in the following hypothetical scenario?

    An undergraduate student is given $2500 as a fellowship grant for summer research. The research is conducted under a professor but NOT for credit. There are no restrictions on what the grant can/cannot be used for.

    From what I understand — if the student uses the grant for tuition and fees, it’s non-taxable. If they use it for personal expenses, it’s taxable.

    In the second (taxable) scenario, does the student owe FICA or just basic income tax? If the student WANTED to report it as income and pay FICA (for example, to get social security work credits) would this be an option?

    Just trying to understand the nuances here — because in some places the IRS says that FICA must be paid if the grant is provided in exchange for research services (as this is basically employment); and in other places it says that students are exempt from FICA when employed by their university.

    Thank you ✌️

    FICA on Undergraduate Research Fellowship?
    byu/Background-Rule641 intax



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