MEDICAL SCHOOL LOAN REPAYMENT PROGRAM

[IRACPA4U]

How to report grant received for medical school student? The income was reported on 1099G in the taxable grant box #6. It is my understanding that this program falls under an exception and is excludable from income even though there is a future service obligation. The program is intended to increase availability of health care in rural areas. I have included the amount in the 1099G section, but I cannot determine where to remove it from income. 

[George4Tacks]

If they are excludible, don't report them. 

https://www.irs.gov/taxtopics/tc421

Alternatively, show an other income as "wording, wording, ... excludible per IRC ###" with a negative amount.  

https://accountants.intuit.com/community/proseries-tax-discussions/discussion/how-to-enter-other-neg...

[Skylane]

If it's reported on line 1099G line 6 and doesn't show up ion Sch 1, other income it's gonna trigger a CP2000 or similar letter.... IMO,  go back to the issuer and get a clarification or a correction.

[qbteachmt]

"and is excludable from income even though there is a future service obligation"

They are not being paid now for future obligation. Did they do qualifying work now?

"You are a candidate for a degree at a medical school. You receive a scholarship (not under any of the exceptions mentioned above) for your medical education and training. The terms of your scholarship require you to perform future services. A substantial penalty applies if you don't comply. The entire amount of your grant is taxable as payment for services in the year it is received."

From: https://www.irs.gov/pub/irs-pdf/p970.pdf