Taxation of Scholarships, Fellowships & Stipends
A scholarship/fellowship payment received by a candidate for degree is generally not taxable income to the student if it is used for "qualified expenses." Qualified expenses are defined by the IRS and include tuition and required fees, and/or for books, supplies and equipment required of all students in the course. These payments do not need to be reported to the IRS by the student or the university.
A scholarship/fellowship used for expenses other than qualified expenses is taxable income. Taxable scholarships are generally referred to as stipends and are payments for which no services are rendered or required. Examples of stipends are payments that can be used for living and incidental expenses such as room and board, travel, non-required books and personal computers, etc. The granting department is responsible for correctly determining the amount, which should be classified as a stipend, but such determination is always subject to review and reclassification by the Tax Department. All stipends are paid through University Payables except for certain athletic living stipends, which are paid through Student Account Services. Although these payments are taxable income to the student or scholar, the IRS does not require the university to withhold tax on the payment. In addition, the university is not required to provide the student/scholar or the IRS any type of year-end summary such as a Form W-2 or Form 1099 for these payments. However, students and scholars are responsible for reporting these payments and remitting any tax due with their personal income tax return, e.g. Form 1040 and the corresponding state form.
In some cases students and scholars may be required to make estimated quarterly tax payments to the IRS and/or State on their stipend income. Please refer to the Tax Forms and Publications to assess whether or not estimated quarterly tax payments are required. Students are responsible for filing the appropriate tax returns with Federal and State tax authorities.
Students and scholars should maintain a record of the stipend payments they have received during the calendar year (January 1 to December 31), remembering to include payments they received by check via University Payables. The total annual payments received can also be obtained from the departmental award letter(s) (remembering to refer to letters from more than one academic year, if applicable, so that amounts are allocated to the correct calendar year).
- International Students and Scholars
- U.S Citizens & Residents
- Taxation of Wages for U.S. Citizens and Residents
- Taxation of Scholarships, Fellowships & Stipends
- Student Loans
- Social Security and Medicare Taxes (FICA)
- State Income Taxes
- Forms and Publications
- Tax Implications and Reporting Requirements of Payments to U.S. Citizens, Permanent Residents or Resident Aliens
- Frequently Asked Questions for U.S. Citizens and Residents
Office of the University Controller
45155 Research Place
Ashburn, VA 20147