Form 1042-S - Box 1, Code 16 Scholarship or Fellowship Income
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Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding is used to report amounts paid to foreign persons (including persons presumed to be foreign) that are subject to tax withholding, even if no amount is deducted and withheld from the payment because of a treaty or exception to taxation, or if any amount withheld was repaid to the payee. It is also used to report amounts withheld under Chapter 3 of the Internal Revenue Code.
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Scholarship or fellowship income reported on Form 1042-S is reported separately. If any of the scholarship or fellowship income is exempt by tax treaty, do not include it in your income entry. To enter your scholarship or fellowship income in the program, follow the steps in the Student Worksheet Entries FAQ.
NOTE: Any amount not used for qualifying education expenses is reported as taxable wages on your tax return. Review IRS Publication 970 to determine which educational expenses are qualified or for additional information.