Federal/state taxation on California-source scholarship income received to support research year abroad
I am a doctoral student at a University of California school, and have been accustomed in the past, while residing in California, to paying both federal and state taxes on that portion of my fellowship income (1098-T income) that is not excludable for qualified tuition and related expenses. From autumn 2022, I left California/the U.S. and went abroad for a period of research that will last at least a year. Shortly before departing, I received a chunk of fellowship income from the University of California that was intended as a stipend to support my upcoming year abroad. My question is mainly as to whether this income is excludable federally. (I understand from the Schedule CA 540NR instructions that it is not excludable in California if the source is a California source, even if the income is supporting activities undertaken in another country. If I am wrong here, I would love to be corrected.) Federally, I think this income may be excludable. I am not certain because the 2555 instructions do not directly address scholarship income; but, if I follow the general principle of treating 1098-T income similarly to wage/salary income, it seems that it should be. However, I hope the fact that I received the income into my bank account before departing the U.S. does not make me unable to exclude it after all? The stated purpose of this income was definitely to support my year abroad. Thank you so much for taking my question!
