Tax FAQ
Many GSAS students ask us questions about state and federal taxes. Brandeis University and its staff are not permitted to give tax advice. We encourage all students to consult the relevant IRS guidance, tax preparation resources, or a tax advisor for the proper treatment in your particular situation. This document is provided for informational purposes only and should not be considered tax, financial or legal advice. For a list of FAQs specific to international students, see the ISSO’s Tax FAQ page.
How is student financial support provided?
There are many categories through which graduate students are paid at Brandeis. The definitions of these categories used by payroll are described here.
Are fellowships taxable?
Fellowship payments are taxable, unless they are excluded from taxable income under Section 117 of the Internal Revenue Code. Tuition reductions are often excluded; “Tuition reductions for graduate education are considered qualified and are excludable only if they are provided by an eligible educational institution to a graduate student performing teaching or research activities for the educational institution.”
Is money from my fellowship withheld for tax purposes?
It depends on your tax status in the United States. The IRS provides a specific exemption to not withhold tax from fellowships paid to domestic students. This exemption does not apply to foreign nationals. Fellowships paid to international students are subject to tax withholding. For F, J, M, and Q visas, the withholding rate is 14%; for all other visas, the withholding rate is 30%.
Are there tax treaty benefits available for individuals the government calls “nonresident aliens” who receive fellowship amounts?
Availability of tax treaty benefits varies with country of origin. Please refer to IRS Publication 901 for more information about tax treaty benefits associated with your fellowship. Tax treaty benefits are not applied automatically. If you believe that you are subject to the benefits of a tax treaty, please contact the Payroll Office.
Will I receive a tax reporting form from the University showing fellowship amounts?
It depends on your tax classification. For domestic students, fellowship stipends are not subject to tax withholding and are self-reported by the students. The University will not issue any tax form to report fellowship stipends to domestic students. For foreign nationals (also known as nonresident aliens for tax purposes), fellowship stipends are reported on Form 1042-S for federal tax purposes. Additionally, fellowship stipends that are derived from or effectively connected with teaching, research, or other services carried on by a non-resident in Massachusetts are includable in Massachusetts gross income and subject to Massachusetts personal income tax. Such amounts are reported on Form W-2 for state tax purposes (the federal equivalent is reported on Form 1042-S, not Form W-2).
How are taxes applicable to funds I receive from the university outside of a fellowship (i.e. hourly positions, other stipend positions, etc.)?
All earned income is generally taxable to the recipient. Your tax withholding amount depends on whether you are a domestic or international student, what your visa status is if you are an international student, what the source of your pay is, whether the pay is as a fellowship, stipend, or hourly position, as well as your tax election as identified on a form W-4.
Does the IRS provide information that might help me?
Yes. For example:
- Federal income tax forms
- IRS Publication 970, Tax Benefits for Education
- Publication 54, Tax Guide for U. S. Citizens and Resident Aliens Abroad
- Publication 519, U. S. Tax Guide for Aliens
- Massachusetts State income tax forms (Home › Individuals and Families › Personal Income Tax › Current Year Tax Information ›)
- IRS Publication 901, US Tax Treaties
Who can I go to for tax advice?
Please reach out to a Certified Public Accountant or tax attorney for personal tax advice. Please note that there is typically a fee that you will be responsible for when working with a tax consultant. We recommend that you confirm the price per hour before you make an appointment and incur personal costs. The following are two local and national resources that are not affiliated with Brandeis and any advice or service they provide is their own:
There are many firms and individuals that can provide these services at varying fee levels.
For non-funded students, the IRS's Volunteer Income Tax Assistance (VITA) program offers free basic tax return preparation to qualified individuals. To locate the closest VITA site to you, use the VITA Locator Tool.
Please note that some centers do not offer services for individuals in the category the IRS calls “non-resident aliens” which includes some international students. It is best to check the website or contact the VITA site to clarify before making an appointment.
Tax Reporting and Withholding by Student Status and Payment Type
Non Resident Alien for Tax Purposes
| Fellowship Payment Through Payroll | Compensation Payment Through Payroll | Taxable Scholarship/Fellowship Above Tuition | |
|---|---|---|---|
| Federal | Federal taxable income and tax withholding reported on 1042S | Federal taxable income and tax withholding reported on a W2 | Federal taxable income and tax withholding reported on 1042S |
| State | No separate state tax withholding, self reported | State taxable income and withholding reported on a W2 | No separate state tax withholding, self reported |
Resident Alien for Tax Purposes
| Fellowship Payment Through Payroll | Compensation Payment Through Payroll | Taxable Scholarship/Fellowship Above Tuition | |
|---|---|---|---|
| Federal | No tax withholding and unreported on a tax document, see Internal Revenue code 117(a) | Federal taxable income and tax withholding reported on a W2 | No tax withholding and unreported on a tax document, see Internal Revenue code 117(a) |
| State | No tax withholding and unreported on a tax document, see Internal Revenue code 117(a) | State taxable income and withholding reported on a W2 | No tax withholding and unreported on a tax document, see Internal Revenue code 117(a) |
Non Resident Alien for Tax Purposes with Signed Tax Treaty
| Fellowship Payment Through Payroll | Compensation Payment Through Payroll | Taxable Scholarship/Fellowship Above Tuition | |
|---|---|---|---|
| Federal | Federal taxable income reported on 1042S | Tax treaty limit reported on 1042S, amount above limit reported on a W2 | Federal taxable income reported on 1042S |
| State | No separate state tax withholding, self reported | Tax treaty limit reported on 1042S, amount above limit reported on a W2 | No separate state tax withholding, self reported |
Domestic Student
| Fellowship Payment Through Payroll | Compensation Payment Through Payroll | Taxable Scholarship/Fellowship Above Tuition | |
|---|---|---|---|
| Federal | No tax withholding and unreported on a tax document, see Internal Revenue code 117(a) | Federal taxable income and tax withholding reported on a W2 | No tax withholding and unreported on a tax document, see Internal Revenue Code 117(a) |
| State | No tax withholding and unreported on a tax document, see Internal Revenue code 117(a) | State taxable income and withholding reported on a W2 | No tax withholding and unreported on a tax document, see Internal Revenue Code 117(a) |
Tax Documents
Many international students receive two types of income from Brandeis University through payroll:
- Earned wages - paid for work in exchange for services (e.g. teaching assistant, research assistant)
- Fellowship payments - paid to support educational endeavors, but not in exchange for services (e.g. PhD stipends, research awards)
International students can also expect to receive (usually by March 15th) either (or both) of two tax documents from Brandeis University each year.
- W-2
- 1042-S
These documents are used to report income to both the federal (United States) and state (Massachusetts) governments. The two types of income are reported to these government entities in different ways and locations on the two tax forms.
W-2
- Box 1 is where earned wages are reported to the federal government
- Note that the amount recorded here may be lower than your gross pay due to certain pre-tax deductions from your earnings
- Box 16 is where BOTH earned wages AND fellowship payments are reported to the state government
1042-S
- Box 2 is where fellowship payments are reported to the federal government
NOTE: Use caution if completing your taxes using a software program as different software may reference these income boxes in different ways. Be sure that the income attributed to Brandeis University by the software does not exceed your combined earned wages and fellowship payments. Brandeis University cannot provide advice on how to complete your tax forms; if you have additional questions beyond what is addressed here, please consult a tax professional.