Scholarships & Fellowships - Nonresident Aliens
In general, under Internal Revenue Code Section 1441(a), all taxable payments to nonresident aliens are subject to U.S. reporting and withholding. The taxable amount of scholarship or fellowship payments made to a nonresident alien depends on the following factors:
Federal Income Tax Withholding & Reporting
Source of grant:
Non-degree candidate or post-doctoral fellow
Tax treaty exemption applies
Tax treaty exemption does not apply
Compensation for services:
Tax Reporting – Grant Recipient
- Determining Tax Status – The grant recipient should complete his or her record on GLACIER (online nonresident alien tax compliance system) to determine tax residency status, applicable withholding rates and eligibility for tax treaty exemptions. Information on GLACIER is available on the Payroll Services website.
- Tax Forms – Payroll Services will notify the recipient of his or her tax status and issue the applicable tax forms:
- Form W-2 to report payments for services.
- Form 1042-S to report taxable non-wage payments.
GLACIER Tax Prep, a web-based tax preparation system designed for nonresident aliens, is available to assist with preparing Form 1040NR or Form 1040NR-EZ. Filers with a GLACIER record can use GLACIER Tax Prep for free. For more information, go to the GLACIER Tax Prep website.