Grad Student Tax Queries: Ohio University Edition

Graduate students at Ohio University are subject to taxes, and the university uses a secure online international tax compliance software called GLACIER to determine the tax status of international students. Domestic students do not have taxes withheld from fellowship stipends as fellowships are considered awards and not pay for service. However, the government considers stipends taxable income, and students may be required to pay federal, state, and city taxes. International students, on the other hand, are subject to U.S. taxation and must use the GLACIER software to prepare their tax returns.

Fellowships are taxable income

Graduate students at Ohio University do not have taxes withheld from their fellowship stipends, as fellowships are considered awards and not pay for services. However, the government considers stipends taxable income, and students may be required to pay federal, state, and local taxes, including estimated taxes.

Fellowships are generally considered taxable income by the Internal Revenue Service (IRS) in the United States. This means that any money received through a fellowship grant is typically subject to income tax. However, there are certain conditions under which a fellowship grant may be tax-free. According to the IRS, "If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free". The specific conditions for tax exemption are as follows:

> You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and

>

> The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.

If the fellowship grant is used for incidental expenses such as room and board, travel, or optional equipment, it is generally considered taxable income. Additionally, any amounts received as payments for teaching, research, or other services required as a condition of receiving the fellowship are also typically included in gross income and subject to tax.

It is important to note that the taxability of fellowship grants can vary depending on the specific circumstances and the individual's tax status. For example, international students' tax liability may be governed by specific tax treaties with their home country. Therefore, it is always recommended that students consult with a tax professional or the IRS directly to determine their specific tax obligations.

Students must manage their own taxes

Students at Ohio University must manage their own taxes. The university does not withhold taxes from fellowship stipends of domestic and some international students because fellowships are considered awards, not pay for service. However, the government considers stipends taxable income. Therefore, students must keep track of their annual stipend amount and may be required to pay federal, state, and city taxes, including estimated taxes.

For example, students at Ohio University who receive a stipend and are not enrolled for at least half-time will have Medicare tax and Ohio Public Employee Retirement System (OPERS) payments deducted from their checks. If a student is enrolled half-time or more, they may apply for an exemption from these fees in their program office. On the other hand, no taxes are withheld from fellowships, but students may still have a tax liability and should consult a tax advisor.

International students at Ohio University who are non-resident aliens for tax purposes can use the GLACIER software to help prepare their tax returns. This software captures the information required to determine the actual tax status of an international person. All international persons who are not U.S. residents and who receive payments from the university are required to have a GLACIER record. GLACIER will determine if a record is not required, such as if the international student meets the definition of a Resident Alien for Tax Purposes or if their home country has a tax treaty with the United States.

It is important to note that the university cannot guarantee that any stipend is tax-exempt, and students are responsible for the withholding information they submit on their W-4 forms. To ensure compliance with tax requirements, students should consult with a tax professional or the Ohio State Tax Office. Additionally, students can visit the IRS's Interactive Tax Assistant (ITA) page to determine if they need to file taxes.

Tax treaties may exempt international students

International students on an F-1 visa are considered nonresident aliens for US federal income tax purposes and are taxed only on US-source income. The US federal government has income tax treaties with 65 countries, and under these treaties, international students may be taxed at a reduced rate or be exempt from US taxes on certain types of income.

If a student is a resident of a country with which the US has entered into a tax treaty that includes an exemption for scholarship and fellowship grants, they may claim a tax treaty withholding exemption by submitting a Form W-8 BEN to the payer of the grant. If the student receives wages and a scholarship or fellowship from the same institution, they can claim treaty exemptions on both types of income using a Form 8233.

However, a student who is claiming a treaty exemption must provide the withholding agent with their Taxpayer Identification Number (TIN), such as a Social Security number (SSN) or an individual taxpayer identification number (ITIN). If the student does not have a TIN, they must apply for one.

It is important to note that tax treaties do not cover all types of income, and some US states do not honor the provisions of tax treaties. Therefore, international students should consult the tax authorities of the specific state they are deriving income from to determine their tax obligations accurately.

Students may need to pay federal, state, and city taxes

Students at Ohio University are responsible for their own taxes. The university does not withhold taxes from fellowship stipends of domestic and some international students because fellowships are considered awards, not pay for service. However, the government considers stipends taxable income. Students should keep track of their annual stipend amount and may be required to pay federal, state, and city taxes, including estimated taxes.

International students who are not U.S. residents and are receiving payments from the university are required to have a GLACIER record. GLACIER is a secure online international tax compliance software that captures the information required to determine the tax status of an international person. If a student is found to be a nonresident alien for tax purposes, they will need to file a special tax form (1040 NR or 1040 NR-EZ) along with Form 8843. They may also need to submit Form 8233 if claiming a tax treaty exemption.

Students who receive a stipend during any academic semester and are not enrolled for at least half-time will have Medicare tax and Ohio Public Employee Retirement System (OPERS) payments deducted from their checks. If a student is enrolled half-time or more, they may apply for an exemption from these fees in their program office. No taxes are withheld from fellowships, but students may still have a tax liability and should consult a tax advisor.

It is important to note that the university cannot guarantee that any stipend is tax-exempt, and students are responsible for the withholding information they submit on their W-4 forms. The IRS maintains the final authority on the taxability of all stipends. Students can use the IRS's Interactive Tax Assistant (ITA) page to determine whether or not they need to file taxes. They can also contact the Ohio State Tax Office at 614-292-2521 for more information.

Students can consult a tax professional

Students at Ohio University are advised to consult a tax professional regarding their tax obligations, especially those in receipt of fellowship stipends. While Ohio University does not withhold taxes from fellowship stipends, the Internal Revenue Service (IRS) considers stipends taxable income. This means that students are responsible for tracking their annual stipend amounts and may be required to pay federal, state, and local taxes, including estimated taxes.

International students, in particular, may benefit from consulting a tax professional as they may be subject to different tax regulations and processes. Ohio State University provides access to GLACIER, an online international tax compliance software, to help international students determine their tax status and prepare their tax returns. However, it is still recommended that they seek advice from a tax professional to ensure they are complying with all relevant tax laws and taking advantage of any applicable tax treaties.

Students who receive a stipend and are not enrolled at least half-time may have Medicare tax and Ohio Public Employee Retirement System (OPERS) payments deducted from their checks. Those who are enrolled half-time or more may be able to apply for an exemption from these fees. Additionally, students with part-time jobs or other sources of income should be aware of their tax obligations and ensure they are meeting their tax requirements.

By consulting a tax professional, students can gain a clear understanding of their tax liabilities and ensure they are complying with all relevant laws and regulations. A tax professional can advise on specific tax obligations, such as the need to pay estimated quarterly taxes, and help students avoid penalties for underpayment. They can also provide guidance on tax deductions, exemptions, and credits that may be applicable to students, such as education-related tax benefits.

Overall, while the tax situation for graduate students can be complex, consulting a tax professional can help Ohio University students navigate their tax obligations and ensure they are meeting their legal requirements.

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