Fellowship stipends may be subject to income taxes. The Internal Revenue Service (IRS) requires universities to withhold taxes from the fellowship payments of international students on temporary visas who are classified as non-resident aliens for tax purposes. Taxable income is reported on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. International students may be able to claim treaty benefits that reduce the withholding rate or exempt fellowship payments from income tax withholding. More information can be found in IRS Publication 519 U.S. Tax Guide for Aliens (PDF), or by calling 1-800-829-3676.
Foreign nationals receiving payments from the University must obtain and furnish the University with either (1) a Social Security Number (SSN) issued by the Social Security Administration (SSA), or (2) an Individual Taxpayer Identification Number (ITIN) issued by the IRS. Learn more about taxpayer identification numbers.
All students on temporary visas must schedule a tax status review appointment with the University Payroll Service Center to determine their tax residency status and whether they qualify for tax treaty benefits. At this appointment, University Payroll determines residency and tax status classification. If withholding is required, fellowship stipend payments are taxed at the highest possible rate until after the tax status review process is completed.
To schedule the tax status review appointment, students should call 217-265-6363 or register online. Students are asked to take a copy and the original of each of the following documents to the appointment:
- A completed version of the Foreign National Tax Information Form (PDF)
- Social Security Number Card, Receipt of application for Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or Temporary Control Number (TCN)
- I-94 card (front and back)
- Passport identification page
- Current U.S. Visa
- All U.S. entry stamps
A payroll representative will be available during the appointment to answer any questions. Because U.S. income tax laws can be confusing, students may also want to consult with their personal tax consultant.
When students file their income tax returns, they should remember that a portion of the fellowship may be exempt from tax. Students are advised to keep receipts in case they are audited at some point in the future. The tuition waiver that comes with the fellowship may be exempt from tax.
More information on taxation of fellowships can be found in IRS Publication 970: Tax Benefits for Education (PDF), or by calling 1-800-829-3676.
Note: Foreign National students must schedule a tax status review appointment with University Payroll each year in order to renew their tax residency status.