|
Tax Information
for UCI Fellowship Recipients
Note: This information is not intended as a substitute for professional/government tax counseling or for reading relevant Internal Revenue Service and California Franchise Tax Board publications.
General
The Internal Revenue Service (IRS) and the California Franchise Tax Board (FTB) consider graduate fellowships taxable income to the recipient and therefore, they require that you complete various tax forms. However, a portion of a fellowship may be excludable from your gross income. Your fellowship payments may include fee, non-resident tuition, or stipend awards. For students pursuing a degree who are receiving fellowship support, that income can be divided into two distinct categories: “qualified scholarship or fellowship” and non-excludable stipends. Fellowship payments for fees and/or non-resident tuition are considered “qualified scholarship” and are not subject to tax reporting. In addition, amounts you spend in the calendar year for fees, books, supplies and equipment that are required of all students enrolled in the course(s) in which you are enrolled may be excludable. Students should always exercise caution when choosing to make these exclusions, as in many cases audits that find a student filed incorrectly conclude that students miscalculated excludable expenses.
Please note that the tax year (the calendar year) and the academic year are very different. Students should only report the fellowship income paid during the tax year. Students should not report the full amount of their academic year fellowship if it extends into the next tax year. Please reference the publications listed below in order to receive instructions and regulations on the calculation of taxable scholarship income. NOTE: Any salary payments you may receive for employment as a Teaching Assistant, Reader, Tutor, Graduate Student Researcher or Graduate Student Assistant Researcher, are not included in the category of “qualified scholarship”. Employment income is "earned" income or "salary & wages" income.
U.S. Citizens and Permanent Residents
U.S. citizens and Permanent Residents do not have Federal taxes withheld from their stipend payments, and the University is not required to report this income to State or Federal tax agencies. If you are a U.S. citizen or resident, you may be required to make estimated quarterly tax payments as necessary to the IRS and/or the FTB on your stipend income. Please refer to the tax publications listed below in order to assess whether or not you will need to make estimated quarterly tax payments. Students are responsible for filing the appropriate tax returns with State and Federal tax agencies.
Nonresidents of the U.S.
If you are a nonresident of the United States and you receive stipend payments, U.S. law requires that Federal taxes be withheld from your stipend payments. You may be exempt from Federal tax withholding if your country of citizenship has a tax-treaty with the United States. The University is not required to withhold State taxes on your stipend payments. Foreign students, like U.S. students, are responsible for filing the appropriate tax returns with both State and Federal tax agencies. In March of each year, foreign students who have received stipend payments in the prior calendar year will receive a Form 1042S from the UCI Accounting Office; this must be attached to your tax return.
Some foreign students may qualify for “residency for tax purposes” and will no longer have Federal taxes withheld from their stipend payments, and will no longer receive the Form 1042S each year. Foreign students are required to submit the Statement of Citizenship to UCI each calendar year; this form is used to determine your tax status under the law.
Note: This list of forms and publications is not intended to be all-inclusive; students may need to refer to other forms and publications not listed here. Students are always strongly encouraged to consult with a tax professional on their individual tax situation. UCI is prohibited from offering tax advice.
Copyright © 2000-2008, Regents of the University of California
For comments or problems with the web site, contact the
webmaster.
UCI Home Page
Last Updated: 08/31/2006
|
