Arkansas Administrative Code
Agency 006 - Department of Finance and Administration
Division 05 - Division of Revenues
Regulation 1997-4 - Comprehensive Individual Income Tax Regulations
Rule 26-51-404 - GROSS INCOME GENERALLY
Rule 7.26-51-404(a)(1) - Scholarships, Fellowships, Grants and Stipends

A scholarship is a grant of money to further the undergraduate education of the recipient without a quid pro quo to the University or the donor. A fellowship is a grant of money for the primary purpose of furthering the education and training of the recipient toward a higher degree or for independent research with no corresponding benefit to the donor. Stipend means wages, salary, or the equivalent thereof, where the context shows that it refers to something given as compensation for services, as for example, where a student for an advanced degree performs services of some type for a school or organization in return for room, board, tuition or other equivalent compensation. Grants made to students for scholarships and fellowships are gifts and therefore not included in taxable income, but stipends are fully taxable. The Director reserves the right to examine the substance of the transaction rather than the name given to it.