Tax Implications

Federal tax implications of student summer research awards for students who are United States citizens
The University of Puget Sound offers the following student study/research awards:

  • Student Summer Research - Science
  • Student Summer Research - Nonscience

Congratulations on your summer research award.  Your award represents an amount intended for your benefit to aid in your pursuit of study or research and as such, is considered a taxable fellowship by the IRS.  Your award will not be reported to the IRS on either Form 1099 or Form W-2.  However, your award is generally includable in your gross income for federal income tax purposes.

The university is not in the position to offer specific tax advice, however we hope you will find the following general information helpful.  You may wish to seek actual advice from a tax professional that is specific to your own tax status.

In general, taxable fellowships, such as this research award, are reported on Line 7 Wages, Salaries, Tips, Etc., of IRS Form 1040 U.S. Individual Tax Return.  Taxable fellowships may normally be included in earned income for purposes of determining the standard deduction allowed if an individual can be claimed as a dependent on another's tax return.  Taxable fellowships are generally not considered income from self-employment and are not subject to self-employment tax.  Tax court_case No._15829-92 supports this, in the event your tax accountant or the IRS should question you about this.

You may find the following IRS forms, instructions, and publications helpful:

  • Form 1040 Individual Tax Return and Instructions
  • Publication 970, Tax Benefits for Education
  • Publication 525, Taxable and Nontaxable Income

These publications may be downloaded from the IRS Forms and Publications Web site.

If you have questions about the information provide above, please contact Office of Finance at finance@pugetsound.edu.

 

 

United States (federal) tax implications of student study & research awards for international students who are citizens of another country
The University of Puget Sound offers the following student study/research awards:

  • Student Summer Research - Science
  • Student Summer Research - Nonscience

Congratulations on your summer research award.  Your award represents an amount intended for your benefit to aid in your pursuit of study or research and as such, is considered a taxable fellowship by the United States Internal Revenue Service (IRS), the federal agency with oversight responsibility for collecting United States taxes and enforcing United States tax laws.

Your award may be subject to United States (federal) income.  This will depend, in part, upon the existence or absence of a tax treaty between your home country (the country where you hold citizenship) and the United States.

If your award is exempt from United States income tax under a tax treaty, you will need to make sure that you have filed the proper IRS exemption form with the university.  If you do not file the exemption form or your home country does not have a tax treaty with the United States, the university may be required to withhold (deduct) United States (federal) income tax from your summer research award.  You also need to make sure you have obtained a United States Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

If you have questions about the information provide above, please contact Office of Finance at finance@pugetsound.edu.