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mattob1234(Newbie)Newbie
30 Aug 2025

Hi,

I am an Australian resident for tax purposes and have received two types of "scholarship/fellowship" payments from my university while studying in the US.

  1. A scholarship explicitly for the purpose of paying travel expenses related to attending a conference to present my PhD research. I believe if this was in Australia, it would be exempt scholarship income. Is this correct?
  2. A "fellowship" payment which more closely resembles an award payment for applying and being selected to participate in a year-long professional development workshop, with the payment being conditioned on completing the university course, which was free. This payment is in addition to my regular living stipend, and is not specifically for regular living costs or educational expenses. Is this exempt or not?

Finally, both of these payments are considered taxable in the US, and I have paid income tax in the US on these scholarships. If either/both of these are exempt income in Australia, can I still count the tax paid on them in the US towards my Australian foreign income tax offset (FITO)?

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3 replies
319 views
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Taxduck(Taxicorn)Taxicorn
30 Aug 2025

Use the tool to determine

Is my scholarship taxable? | Australian Taxation Office

Generally PhD scholarships (in Australia) are exempt from tax as they are provided by the university and there are no contracted obligations placed on you to undertake income producing activities either during or after graduation.

The only way you could use the tax withheld on this income as a FITO is to declare it as taxable income on your Australian tax return.

mattob1234(Newbie)Newbie
1 Sept 2025

Hi Taxduck,

These payments are very different to the Australian RTP PhD Scholarship as they are not "living costs" type stipends. I found the "Is my scholarship taxable?" tool but found the last question "Is the scholarship payment provided principally for educational purposes?" to be inconclusive (in my opinion). Hence my question here. For the first type of payment (travel), I lean towards yes because it is research related, but the travel was not a course requirement, so I'm not sure. For the second type, the scholarship was merit-based and the payment was made conditionally on completing a course, but there were no conditions on what the money could be used for, so again, not sure.

Thank you for clarifying the last point; that's clear. Still, because withholding rates on scholarships in the US are fairly low, it makes a much bigger difference to me financially whether or not these scholarships are taxable at all, even including the FITO.

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Is my foreign scholarship/award taxable in Australia? | ATO Community