Taxes
This page is for informational purposes only, and should not be considered tax, financial. or legal advice. Please consult your own tax or financial advisor with questions.
US Citizens, Permanent Residents, and Resident Aliens for Tax Purposes
Fellowships and assistantships (job titles such as “Grad Fellowship/Stipend” or “Grad Assistantship”) are not considered compensation for services (i.e., wages). These amounts are for your educational benefit (whether that fulfills research or teaching requirements for your degree).
According to the IRS, amounts received as fellowships are not required to be reported as wages on a W-2 or as income on a Form 1099-MISC. However, these amounts are taxable income if used for nonqualified expenditures.
Qualified expenditures include:
- University tuition and fees
- Books
- Supplies and equipment required for courses
Nonqualified expenditures include:
- Room and board
- Travel
- Equipment
- Living expenses not required as part of education
Because these fellowships are not considered wages, they are not subject to income tax withholding when paid.
You will receive an email from HRMS in January that provides your total fellowships/assistantships for the pervious calendar year.
To view or print your letter, log on to HRMS with your NetID and password. Once you are logged in to HRMS, click on: Main Menu > Self-Service > Payroll and Compensation > View Fellowship/Assistantship Statements.
This letter is for informational purposes and is not required to be filed with the IRS or New York State Department of Taxation and Finance when you file your 2019 tax return. We recommend you save this letter to document the taxable amount of fellowship/assistantship that you report on your tax return.
Filing Income Tax Returns
Step 1: Gather the documents necessary to complete your federal and state income tax returns, including:
- W-2 forms from employment you may have had during the previous year
- University of Rochester fellowship/assistantship letter for Fellowship/Assistantship in HRMS (Click on Main Menu > Self-Service > Payroll and Compensation > View Fellowship/Assistantship Statements)
- 1099 Forms (1099-MISC, 1099-DIV, 1099-INT)
- Documentation/receipts for any qualified educational expenses (fees, books, and supplies required for any courses)
Step2: Determine the federal/state income tax returns that you will need to complete:
- Federal (IRS): New Form 1040
- State:
- If you’re a New York resident – file Form IT-201
- If you’re non-resident or part-year resident of New York:
- You may need to file Form IT-203 (non-resident/part-year resident) with New York state
- You may need to file an income tax return in your state of residence
Step 3: Complete the federal/state income tax returns
When completing your forms, you will need to:
- Determine your taxable income (see the most recent Tax PowerPoint for examples)
- Complete applicable wage/income lines on tax returns
- Enter “SCH = $(XX)” on Form 1040 in the space to the left of the “Wages, salaries, tips” line of your tax return; the amount reported as “SCH” is the amount of your fellowship/assistantship that you determined is taxable
- Include the following in the “Wages, salaries, tips” line of your tax return:
- Amounts from Box 1 of your W-2s
PLUS
- Taxable scholarships/fellowship amounts received
If you’re using a commercial software program such as TurboTax or TaxSlayer, follow the instructions provided by the software provider to report your fellowship/assistantship.
Some commercial software programs will force the federal self-employment tax to calculate if you enter an amount as wages on your return, but this amount is not reflected on a W-2. You are not subject to self-employment tax on your fellowship/assistantship, so make sure this does not occur.
Most commercial software program have a help or chat feature if you need assistance. You can also see the most recent PowerPoint for walk-through instructions for Turbo Tax.
Step 4: File your tax returns by April 15 (or file an extension with IRS/NYS)*
In 2020, the deadline to file your 2019 federal and New York State taxes was extended to July 15, 2020.
Federal 1040 options:
- Mail paper form
- Use IRS Free File if your adjusted gross income is $69,000 or less
- Use commercial tax software (TurboTax, TaxSlayer, etc.)
- See individual tax provider to prepare returns (e.g., H&R Block)
- Meet with an IRS Volunteer Income Tax Assistant if your taxable income is $56,000 or less
NY tax form options:
- Mail paper form
- Use Free File software if your adjusted gross income is $69,000 or less
- Use commercial tax software (TurboTax, TaxSlayer, etc.)
- See individual tax provider to prepare returns (e.g., H&R Block)
Record Keeping
The IRS recommends that you keep records for three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
Keep records indefinitely if you do not file a return.
Nonresident Aliens for Tax Purposes
For students who are non-resident aliens for tax purposes, withholding for fellowships/assistantships depends on whether your country of residence has a tax treaty with the United States for scholarships/fellowships and your completion and submission of the necessary paperwork to the University’s Payroll Office.
To receive tax treaty benefits (i.e., reduced or no withholding), you must:
- Have an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN)
- Update your Glacier record
- Submit Form W-8 BEN and/or Form 8233 to the Payroll Office
Tax withholding will occur if required (no tax treaty benefit or the paperwork not turned in).
Regardless of whether you are subject to tax withholding on your fellowship/assistantship, all fellowship/assistantship payments to non-resident aliens for tax purposes are reported on Form 1042-S. You should have received an email from Glacier in January with instructions on how to view and print your 2019 Form 1042-S.
To complete your tax filings, you will need your:
- W-2 forms
- 1099 forms (1099-MISC, 1099-DIV, 1099-INT)
Resources
You can access Glacier Tax Prep (GTP) to prepare your federal tax forms. All forms must be printed, signed, and mailed—you are not eligible to e-file through GTP.
The International Services Office (ISO) has a detailed tax page, and typically offers tax webinars in March and April. You can also request assistance with your tax forms by scheduling an appointment with the ISO’s GTP assistant.
Tax Workshops
Graduate Education and Postdoctoral Affairs offers a tax workshop every year: