Fellowship payments used for incidental expenses, including room and board, travel, and optional equipment are taxable. So too are amounts received for teaching, research, and other services required as a condition for receiving the fellowship. The only exception: amounts received for services required by the National Health Service Corps Scholarship Program or the Armed Services Professional Scholarship and Financial Assistance Program.
Net income after claiming all deductions from gross income and adjusted gross income, such as IRA deductions, itemized deductions, or the standard deduction, and personal exemptions.