What is a Stipend? A Comprehensive Guide to Its Legal Definition

Definition & Meaning

A stipend is a fixed amount of money paid regularly to individuals for their services or to help cover specific expenses. Unlike salaries or wages, which are typically subject to employment taxes, stipends may not carry the same tax implications. The payment of stipends is governed by the policies of the entity providing them, which could be educational institutions, non-profit organizations, or other governing bodies.

Table of content

Legal Use & context

Stipends are commonly used in various legal contexts, particularly in education and employment law. They may apply to:

Internships and fellowships, where stipends support individuals during their training.
Scholarships, where stipends help cover living expenses for students.
Volunteer positions, where stipends may be offered to defray costs incurred while performing services.

Users can often manage stipend-related matters through legal forms and templates available on platforms like US Legal Forms.

Key legal elements

Real-world examples

Here are a couple of examples of abatement:

Example 1: A university offers a $1,500 stipend to graduate students who assist in research projects. This stipend helps cover their living expenses while they work on their studies.

Example 2: A non-profit organization provides a $500 monthly stipend to volunteers who travel to various locations to support community projects. (hypothetical example)

State-by-state differences

Examples of state differences (not exhaustive):

State	Stipend Regulations
California	Stipends for internships must comply with minimum wage laws.
New York	Stipends may be subject to state income tax considerations.
Texas	Stipends for educational purposes are generally exempt from taxation.

This is not a complete list. State laws vary, and users should consult local rules for specific guidance.

Comparison with related terms

Term	Definition	Key Differences
Salary	A fixed regular payment, typically paid on a monthly or biweekly basis.	Subject to employment taxes; generally higher than stipends.
Wages	Payment based on hours worked or output produced.	Paid hourly; also subject to employment taxes.
Grant	A sum of money given by an organization for a specific purpose.	Typically does not require services in return, unlike stipends.

Common misunderstandings

What to do if this term applies to you

If you're receiving or considering a stipend, review the terms set by the governing entity carefully. Understand how it may affect your taxes and any obligations you might have. For those needing assistance, US Legal Forms offers templates that can help you navigate stipend agreements and related documents. If your situation is complex, consulting a legal professional may be advisable.

Find the legal form that fits your case

Browse our library of 85,000+ state-specific legal templates.

This field is required

Quick facts

Typical amount: Varies widely based on the entity and purpose.
Jurisdiction: Governed by the policies of the issuing entity.
Tax implications: May differ from salary or wages.