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 fellowship 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 complete a Tax Status Review with University Payroll & Benefits (UPB) to determine their tax residency status and whether they qualify for tax treaty benefits. If a tax treaty is not applicable, fellowship payments are subject to federal tax withholding. To request a review, students should visit the Foreign National Tax Status Review website.
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. Because U.S. income tax laws can be confusing, students may also want to consult with their personal tax consultant.
If you have questions about tax withholding from fellowship payments, please contact University Payroll & Benefits at the UPB Service Portal.