It is necessary to distinguish between student travel that is considered a reimbursement and student travel that is considered a scholarship.
Reimbursements are not reportable to the Internal Revenue Service (IRS) as income to the student if the student can document that the reimbursement:
- Directly supports a faculty member's project or research program, or
- Is related to presenting at a conference on behalf of GW, or
- Is official university business
Any reimbursement to an undergraduate or graduate student which does not meet one of the criteria will be taxable scholarship income to the recipient but is not reported on IRS Form W-2 or 1099-MISC.* It is the recipient's responsibility to maintain records for these scholarship payments.
*Nonresident aliens for U.S. tax purposes are required to have a 14% federal withholding (assuming F-1 or J-1 visa) and the payment will be reported as scholarship income on Form 1042-S.
Student reimbursements are of a complex nature and the below explanations are not inclusive and determinations may need to be made on an individual basis.
The student travel payment is generally considered reimbursement (nontaxable, non-reportable) if:
- The primary purpose and original intent is for the university to obtain useful results from the project/research
- Results or research will be used by the university
- Research is performed to fulfill university's obligations to outside funding entity
- Student is presenting or actively participating in a conference or competition on behalf of the university
Examples of nontaxable, non-reportable reimbursement
- Student travels to Texas to represent the university in a scholastic competition.
- Student travels to Michigan to present at a conference, where the student's name is published (poster, website, brochure) as a presenter/contributor at the conference.
- Student travels to China to perform research, which happens to be the topic of her dissertation. The university would otherwise perform research on this topic, regardless of the student's research – the university is the primary beneficiary.
The student travel grant payment is generally considered to be scholarship (taxable, reportable) if:
- Reimbursement is made for activities in which the university is relatively disinterested or the research is student led
- The project/research's primary purpose and original intent is to further the student's education or training
- The university obtains little or no benefit
- Activities are performed to contribute to the development of the skills needed in the student's studies
Examples of Taxable Travel Grant or Scholarship
- Student travels to the United Kingdom for dissertation research which is not research the university would otherwise conduct – the student dissertation is the primary purpose of the travel – the student is the primary beneficiary.
- Student travels to a conference in Mexico as an attendee and does not present/contribute in official capacity.
- Student travels to China for Mandarin language training which will assist in language proficiency needed for degree. This is supplemental work that the student may need to succeed, but it is not a required part of the degree.
TAXES and REPORTING:
Domestic Students (includes U.S. Citizens, permanent residents and residents for tax)
Business related reimbursements are not considered reportable or taxable income. There is no tax withholding requirement for scholarship/fellowship payments, but this income is reportable and taxable income to the recipient. This income is not reported on a tax document (e.g. IRS Form W-2 or 1099-MISC), but is considered to be self-reported income per IRS publication 970. Students may be required to pay estimated quarterly taxes to federal and state tax authorities on this income. Please seek advice from your personal tax advisor regarding this if needed.
International Students (nonresident aliens for U.S. tax purposes)
Business related reimbursements are not considered reportable or taxable income. Assuming F-1 or J-1 visa, there is a 14% federal tax withholding on scholarship/fellowship payments, and this income is reportable and taxable income to the recipient. This income is reported on IRS Form 1042-S. Students may be required to pay estimated quarterly taxes to federal and state tax authorities on this income. Please seek advice from your personal tax advisor regarding this if needed.
- Tax Forms and Exemptions
- Unrelated Business Income Tax
- Worker Classification
- Sales Tax
- Schedule F Reporting
- Other Policies and Procedures
- Tax Considerations For International Activities
- University Tax Frequently Asked Questions