Assistantship stipends are taxed at the time of disbursement.
Fellowships and Awards
The method of fellowship and award payments determines whether taxes are withheld at the time of allocation.
Except in rare circumstances, fellowships through the Graduate School are distributed through payroll and do include a withholding of taxes because a graduate assistantship is required for fellowship students. If a fellowship, scholarship, or other university award is distributed through financial aid as stipends, whether as a monthly or one-time allocation, in the fall and spring semesters, taxes will generally not be withheld.
International students may face different tax rules, and may have a 14% tax withholding; more information is available by contacting the Nonresident Tax Office at email@example.com.
Students must check with external fellowship sources to learn whether taxes will be withheld from the stipend.
Arranging for Tax Withholding
If a student has an assistantship or is employed by the University, income tax withholding is based upon completion of form W-4.
Employees always have the option to withhold additional tax from an assistantship stipend or paycheck to minimize taxes at the end of the calendar year. U.S. tax residents may update their W-4 form at any time via the myhr self-service portal (myhr.umsystem.edu). Contact the Payroll Office (325 Jesse Hall) or firstname.lastname@example.org for more information.
International students who qualify as nonresident tax payers may experience relatively higher tax rates on employment income. The Nonresident Tax Office can provide guidance regarding this scenario. Contact email@example.com for more information.
If Taxes Have Not Been Withheld
If taxes have not been withheld at the time of filing income taxes, the fellowship is reported as unearned income.
No W-2 or Form 1099 will be issued by the University. It is the student’s responsibility to report the fellowship amount. This requires completing the IRS 1040 long form.
Volunteer Taxpayer Assistance
Volunteer Income Tax Assistance (VITA) provides free tax assistance to many students and employees. Eligibility is based primarily upon income, and graduate students frequently qualify. Current year information becomes widely available in late January or early February.
Tax payers with nonresident tax status may need specific support to file form 1040-NR. International students may contact firstname.lastname@example.org for assistance with determining tax residency and learning more about how to file U.S. tax returns.