American living in Germany receiving a study grant from UK Charity - What are the tax implications of this?

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Hello,
 
I am an American citizen living in Berlin under my husband's Blue Card. My husband only makes income in Germany and I do not currently have any income. 
 
Our current tax status in Germany is Class III/V
 
I have been offered a grant by a UK Charity to do work for them for 6 months for around 7,500 pounds. They are labeling it as a grant to study and offered to pay me to my American bank account (I only have N26 is an EU alternative).
 
What are the tax implications for this scenario in Germany and in the US? They said they could be flexible about labeling the grant/where the payment goes if it would impact me negatively to do it the way they set it up.
 
I just don't want to be in a situation where I agree to this grant and then end up paying most of it back in taxes.
 
Thanks for your help
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They can call it a grant, a stipend, or something else, but as the German tax office sees it, income is income.

 

Whether it is taxable and, if so, in what amount, will depend on your husband's income (assuming you're filing jointly). There are various German income tax calculators that you can use to determine the difference in the tax you'll owe with and without your additional income.

 

Given the generous FEIE and dual-taxation treaties, it's unlikely you'll end up owing any U.S. taxes on it - unless your husband's income is high enough that you fall under the AMT.

 

Please note, however, that I'm not an accountant and the above does not constitute qualified legal or tax advice.

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15 hours ago, El Jeffo said:

They can call it a grant, a stipend, or something else, but as the German tax office sees it, income is income.

Maybe not. At least German grants aren´t always taxable. I used to receive a stipend by the DFG (Deutsche Forschungsgemeinschaft) which wasn´t taxable. That was 35 years ago though. But still worth asking methinks.

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I think put simply, if you are, in reality, being paid for services provided to the payer, i.e. paid for the work you are doing for them, then it is almost certainly taxable income in whichever country.  If they are simply supporting you without receiving anything in return then it may be treated as non-taxable, depending on the precise facts.

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4 hours ago, GaryC said:

I think put simply, if you are, in reality, being paid for services provided to the payer, i.e. paid for the work you are doing for them, then it is almost certainly taxable income in whichever country.  If they are simply supporting you without receiving anything in return then it may be treated as non-taxable, depending on the precise facts.

Understood, thanks!

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