Frequently Asked Questions

Departmental Scholarship or Fellowship Tax

• Is a scholarship or fellowship taxable?

A scholarship or fellowship is subject to tax if it exceeds the tuition charges and required book fees. Read more in IRS publication 970, page 4.

• Which offices disburse scholarship or fellowship money to students?

A scholarship, fellowship, prize or stipend may be disbursed from the Student Fiscal Services (SFS) Office if a student is enrolled in the current quarter. Otherwise, the Payables Administration Office or the Payroll Office will handle the disbursement. Each of these offices also manages the tax withholding for any award.

• Why do Nonresident Alien (NRA) students need to get a Social Security Number (SSN)?

The Internal Revenue Service (IRS) requires all students to have an SSN. The IRS fines the UW $50 per nonresident alien student if they do not have an SSN recorded in the UW payroll system or Student Database (SDB) system.

• Where can an NRA student apply for an SSN or a Tax Identification Number (TIN)?

You may apply for an SSN by getting a letter from the International Services Office and taking it to any Social Security Administration office; or get a TIN from the Payables Administration Office if you are not eligible to apply for an SSN.

• Do I need to pay taxes if I receive a scholarship or fellowship?

Yes, you need to pay taxes for any amount the exceeds your tuition charges. As an NRA student, you will be charged 14% tax if you have an SSN in the SDB system. You will be charged 30% tax if you do not have an SSN in the SDB system.

• What do I need to do if I come from a treaty country?

If you come from a treaty country, you need to file a W8-BEN form to declare the treaty country status. You can get the form from the Payroll Office, or from your department. After you complete the form, send it to Student Fiscal Services (Box 355870).

• Do I need to pay tax if I didn't have a W8-BEN form on file?

Yes, if you didn't file a W8-BEN form, you will be charged regular tax if your scholarship or fellowship exceeds your tuition, books and fees.

• Can a departmental budget pay my taxes?

Yes, a department may use its budget to pay for your NRA tax withholding in the SDB system, but in order to do so, it must increase the award amount by 14%. Otherwise, SFS will take out the 14% tax before the money is awarded to you.

• What is the 1042S form?

It is for nonresident alien students that received US source income while studying at the UW.

• Who receives the 1042S form?

The 1042S form will only be given to nonresident alien students who have received scholarship or fellowship money that exceeds their tuition and related fee charges. You will not recieve a copy of the 1042S form if you only have a tuition waiver on your account and do not receive any checks.

• As an NRA student do I qualify for the Hope or Lifetime Learning Tax Credit?

No, nonresident alien students do not qualify for these tax credits. Anyone who is at the UW with a visa does not qualify to claim these credits either, even if an income tax return is filed every year. Therefore, you will not be sent a 1098T tax form.

• Which office should I contact if I have questions regarding Hope and Lifetime Learning Tax Credit, scholarship or fellowship taxes, and NRA students' tax questions?

Contact Student Fiscal Services by calling 206-221-2621, or sending email to taxquest@u.washington.edu