College Classes » From: Somewhere in the World Dear TaxMama, Help! My husband, Ed, thinks you are the ultimate authority on tax matters. He forwards many of your ILaugh business humor items and suggested I contact you with this question: As an incentive for returning to college classes, a local early child care education agency provided a student stipend that was paid to teachers enrolling and satisfactorily completing a technical certificate of credit through a local technical college. The stipend was in the amount of $400 and was paid after copies of the grade transcript was furnished. According to the terms of the stipend application "the stipend is a $400 cash bonus that can be used to offset expenses associated with going to school, such as transportation, child care, etc. or to supplement living expenses." I'm presuming this is shown as other income on my individual tax form. Am I correct or is there any way this can be exempted? I hope you will forward a prompt reply so we can settle this question and get on with more important things (like vacation). Thanks for your help, Penny Hi Penny, Are you employed by this child care agency? If so, this sounds more like a reimbursement to me. Which would not be reported at all. On the other hand, if you are not an employee of the agency, yes, it would be other income - and you could take all the costs as Miscellaneous Itemized Deductions on Form 2106 (Employee Business Expenses) or Schedule A Use the money in good health and have a great vacation! Best wishes Eva Rosenberg Your TaxMama Click Here for TaxMama's Honor System