Some or all of any payment you receive as an OSU student may be taxable by the U.S. Internal Revenue Service (IRS), depending on your personal circ*mstances. OSU has created this website to provide general information about the possible tax consequences of different types of payments students may receive.
Please note that use of this site does not constitute advisem*nt. Oregon State University employees, while in their official role at the university, are not allowed to act as tax consultants or provide personal tax advice. For personal tax questions, individuals should consult with a professional tax advisor.
Payment Types
Scholarship
An amount paid to, or for the benefit of, a student at an educational institution to aid in the pursuit of studies. Scholarships and fellowships are often characterized together as they have overlapping characteristics, both being specifically tied to activities at an educational institution.
Scholarship payments are viewed as non-taxable by the IRS if amounts are used for qualified educational expenses. Be aware that amounts received for incidental expenses, such as room and board, travel, and optional equipment are considered taxable income.
U.S. Citizen and Permanent Resident Students
Tax Withholding
Scholarships are not subject to tax withholding at the time of payment. Students are responsible for reporting scholarship payments to the IRS when they file their personal taxes.
Tax Documentation
Most scholarship payments are processed by the OSU Student Accounts Office so the funds can be applied to your OSU billing account. This includes scholarships offered by colleges, academic departments, OSU programs, and external scholarships that are posted to your student account. For all scholarships posted to your OSU student billing account, the total amount received in scholarships will appear on your 1098-T form. These forms are mailed to students in January.
Non-Citizen Students
Tax Withholding ("NRA Withholding")
Tax withholding means that a portion of a student’s payment is set aside by Oregon State University so that it can then be transmitted to the IRS, which is required by law for non-citizen students who receive payments that are classified as taxable income.
The amount of funds withheld from student payments is calculated based on three primary factors: type of payment, visa type, and country of residence.
Type of Payment
Payments for qualified educational expenses are considered non-taxable income. Qualified educational expenses typically include tuition, mandatory fees, course fees, and mandatory health insurance.
Payments for non-qualified educational expenses are items considered indirectly related to the cost of education. These are often highly subjective and dependent on a variety of factors. Examples of non-qualified educational expenses include meals, lodging, non-mandatory medical insurance, medical charges, travel, personal living expenses, and stipends.
Visa Type
Certain visa types automatically qualify for a reduced rate of tax withholding on income received by students. The default tax rate for non-citizen students is 30%, but students with an F, J, M, or Q visa usually are taxed at 14%.
Country of Residence
The United States has established agreements with some foreign countries on how specific activities within the U.S. will be taxed. Those agreements are referred to as tax treaties. Tax treaties usually benefit a student and can provide an opportunity to either exempt the payment entirely from tax withholding or reduce the tax withholding rate to an amount less than the default 30%.
Click Here to View a List of Countries with Tax Treaties
A U.S. issued social security number (SSN) or individual taxpayer identification number (ITIN) is required to claim tax treaty benefits. For instructions and forms, please click Here.
Tax Calculation
The default rate of tax withholding for non-citizen students is 30%. Tax withholding will only be applicable to the portion of the payment attributable to non-qualified educational expenses.
Qualified Educational Expenses Example: If you receive a $10,000 scholarship and your qualified educational expenses are $8,000, your non-qualified educational expenses are $2,000. You would have tax withholding applied to the $2,000, instead of the full amount ($10,000) of the scholarship.
14% Tax Withholding Example: During the Winter 2024 term, your tuition and mandatory fees are $5,640.12, and the total sum of your U.S. source funding is $14,432.00. As the funding exceeds the tuition and mandatory fees by $8,791.88, the IRS considers that $8,791.88 to be taxable income. Therefore, a tax withholding (“NRA Withholding”) of $1,230.87 will be placed on your account (14% of the amount of funding greater than tuition and fees), and you will receive a $7,561.01 refund.
30% Tax Withholding Example: During the Winter 2024 term, your tuition and mandatory fees are $5,640.12, and the total sum of your U.S. source funding is $14,432.00. As the funding exceeds the tuition and mandatory fees by $8,791.88, the IRS considers that $8,791.88 to be taxable income. Therefore, a tax withholding (“NRA Withholding”” of $2,637.57 will be placed on your account (30% of the amount of funding greater than tuition and fees), and you will receive a $6,154.31 refund.
Tax Documentation
Most scholarship payments are processed by the OSU Student Accounts Office so the funds can be applied to your OSU billing account. This includes scholarships offered by colleges, academic departments, OSU programs, and external scholarships that are posted to your student account. For all scholarships posted to your OSU student billing account, the total amount received in scholarships will appear on your 1098-T form. These forms are mailed to students in January.
Non-Citizen students receiving scholarship income not applied directly to tuition and fees will also receive a 1042-S. Form 1042-S will be mailed to employees, students and scholars around March 15, each year. Please verify your postal mailing addresses are up to date in Online services or myOSU. Please wait until you receive the 1042-S to file your tax return even if you have a 1098-T and/or W-2 (remember, some students may get both).
Fellowship
A fellowship is an amount paid for the benefit of an individual to aid in the pursuit of study or research. Fellowships and scholarships are often characterized together as they have overlapping characteristics, both being specifically tied to activities at an educational institution. A common fellowship offered at Oregon State University is an appointed Graduate Fellowship.
Fellowship payments are viewed as non-taxable by the IRS if amounts are used for qualified educational expenses. Be aware that amounts received for incidental expenses, such as room and board, travel, and optional equipment are considered taxable income.
U.S Citizen and Permanent Resident Students
Tax Withholding
Fellowships are not subject to tax withholding at the time of payment. Students are responsible for reporting fellowship payments to the IRS when they file their personal taxes.
Tax Documentation
Some fellowship payments are processed by the OSU Student Accounts Office so the funds can be applied to your OSU billing account. This includes fellowships offered by colleges, academic departments, OSU programs, and a few external fellowships that are posted to your student account. Examples for OSU Graduate Fellowship appointments include Provost Distinguished Fellowships, Prestigious Diversity Fellowships, and graduate fellowships offered through the OSU Foundation-support funds. These payments will be posted on or near the start of the academic term of your fellowship. For all scholarships and fellowships posted to your OSU student billing account, the total amount received in scholarships + fellowships will appear on your 1098-T form. These forms are mailed to students in January.
Some fellowship (stipend) payments are processed through OSU Business Affairs, as direct monthly payments, rather than posting to the student account. These payments are managed by Accounts Payable. These fellowships are typically supported by research grants administered by Oregon State University, or nationally-competitive awards. Examples for OSU Graduate Fellowship appointments include the NSF-Graduate Research Fellowship Program, NASA FINESST, NIH predoctoral fellowships, among others. These payments are issued directly to you as a student in monthly installments, typically near the beginning of the month. OSU does not provide IRS tax documentation for these payments. For the current and upcoming tax years, fellows should contact accounts.payable@oregonstate.edu after February 1 each year to obtain the amount for tax reporting in the prior tax year. This process may require contacting another person for the information after Accounts Payable, but you must first contact them to determine who is authorized to release the information.
Non-Citizen Students
Tax Withholding ("NRA withholding")
Tax withholding means that a portion of a student’s payment is set aside by Oregon State University so that it can then be transmitted to the IRS, which is required by law for non-citizen students who receive payments that are classified as taxable income.
The amount of funds withheld from student payments is calculated based on three primary factors: type of payment, visa type, and country of residence.
Type of Payment
Payments for qualified educational expenses are considered non-taxable income. Qualified educational expenses typically include tuition, mandatory fees, course fees, and mandatory health insurance.
Payments for non-qualified educational expenses are items considered indirectly related to the cost of education. These are often highly subjective and dependent on a variety of factors. Examples of non-qualified educational expenses include meals, lodging, non-mandatory medical insurance, medical charges, travel, personal living expenses, and stipends.
Visa Type
Certain visa types automatically qualify for a reduced rate of tax withholding on income received by students. The default tax rate for non-citizen students is 30%, but students with an F, J, M, or Q visa usually are taxed at 14%.
Country of Residence
The United States has established agreements with some foreign countries on how specific activities within the U.S. will be taxed. Those agreements are referred to as tax treaties. Tax treaties usually benefit a student and can provide an opportunity to either exempt the payment entirely from tax withholding or reduce the tax withholding rate to an amount less than the default 30%.
Click Here to View a List of Countries with Tax Treaties
A U.S. issued social security number (SSN) or individual taxpayer identification number (ITIN) is required to claim tax treaty benefits. For instructions and forms, please click Here.
Tax Calculation
The default rate of tax withholding for non-citizen students is 30%. Tax withholding will only be applicable to the portion of the payment attributable to non-qualified educational expenses.
Qualified Educational Expenses Example: If you receive a $10,000 scholarship and your qualified educational expenses are $8,000, your non-qualified educational expenses are $2,000. You would have tax withholding applied to the $2,000, instead of the full amount ($10,000) of the scholarship.
14% Tax Withholding Example: During the Winter 2024 term, your tuition and mandatory fees are $5,640.12, and the total sum of your U.S. source funding is $14,432.00. As the funding exceeds the tuition and mandatory fees by $8,791.88, the IRS considers that $8,791.88 to be taxable income. Therefore, a tax withholding (“NRA Withholding”) of $1,230.87 will be placed on your account (14% of the amount of funding greater than tuition and fees), and you will receive a $7,561.01 refund.
30% Tax Withholding Example: During the Winter 2024 term, your tuition and mandatory fees are $5,640.12, and the total sum of your U.S. source funding is $14,432.00. As the funding exceeds the tuition and mandatory fees by $8,791.88, the IRS considers that $8,791.88 to be taxable income. Therefore, a tax withholding (“NRA Withholding”” of $2,637.57 will be placed on your account (30% of the amount of funding greater than tuition and fees), and you will receive a $6,154.31 refund.
Tax Documentation
Some fellowship payments are processed by the OSU Student Accounts Office so the funds can be applied to your OSU billing account. This includes fellowships offered by colleges, academic departments, OSU programs, and a few external fellowships that are posted to your student account. Examples for OSU Graduate Fellowship appointments include Provost Distinguished Fellowships, Prestigious Diversity Fellowships, and graduate fellowships offered through the OSU Foundation-support funds. These payments will be posted on or near the start of the academic term of your fellowship. For all scholarships and fellowships posted to your OSU student billing account, the total amount received in scholarships + fellowships will appear on your 1098-T form. These forms are mailed to students in January.
Some fellowship (stipend) payments are processed through OSU Business Affairs, as direct monthly payments, rather than posting to the student account. These payments are managed by Accounts Payable. These fellowships are typically supported by research grants administered by Oregon State University, or nationally-competitive awards. Examples for OSU Graduate Fellowship appointments include the NSF-Graduate Research Fellowship Program, NASA FINESST, NIH predoctoral fellowships, among others. These payments are issued directly to you as a student in monthly installments, typically near the beginning of the month. These payments will be subject to tax withholding prior to the student receiving payment.
Non-Citizen students receiving fellowship income not applied directly to tuition and fees will also receive a 1042-S. Fellowship income includes both payments issued to the student account and direct payments managed by Accounts Payable. Form 1042-S will be mailed to employees, students and scholars around March 15, each year. Please verify your postal mailing addresses are up to date in Online services or myOSU. Please wait until you receive the 1042-S to file your tax return even if you have a 1098-T and/or W-2 (remember, some students may get both).
Reimbursem*nt
A reimbursem*nt is an amount paid to offset costs that a student incurred and paid for directly. The IRS always requires the student to document the reimbursem*nt with receipts supporting the original payment they made.
Reimbursem*nts are not considered by the IRS as income if they are documented properly.
Compensation
An amount paid to an individual in exchange for services. These payments sometimes are referred to as wages, salaries, or professional fees, but calling a payment made in exchange for services a fee or stipend does not change the nature of payment.
Compensation is always viewed by the IRS as income earned by the recipient.
Payments for compensation are initiated through the Office of Human Resources for US Domestic, Permanent Residents, and Non-Citizen Students.
Tax Forms Basics
1098T statements are mailed to students by January 31st. The dollar amounts may assist you in completing IRS Form 8863 - (the form used for calculating the education tax credits that a taxpayer may claim as part of your tax return). For more information: https://fa.oregonstate.edu/controllers-unit/student-accounts/1098t
- To obtain prior years: The data is also available to view online through MyOregonState. Students can also view prior year 1098-T tax information online. You can find instructions for accessing your 1098T online here.
- See a sample 1098T here
- Read more about the 1098T here [IRS link]
1042S statements are mailed to students by March 15th. The dollar amounts may assist you in completing your US Tax Return. Amounts reflected on individual form 1042S statements are also reported to the IRS on a summary return 1042. The statements are generated by the Accounts Payable department. Prior year forms or current year copies can be requested by contacting accounts.payable@oregonstate.edu. These forms are not currently available online through MyOSU or BeaverHub.
- See a sample 1042S
- Read more about the1042S here [IRS link]
1099MISC & 1099NEC statements are mailed to students by January 31st. The dollar amounts reported may assist you in completing your US Tax Return. 1099 tax statements are less common for students, but are generated in some cases where payments are made for non-qualified educational expenses. Stipends provided to defray the cost-of-living expenses during summer academic programs are a common example. Awards and Prizes are also reported on a 1099.
- See a sample 1099MISC
- See a sample 1099NEC
- Read more about the 1099MISC and 1099NEC here [IRS links]
Resources
- OSU Fiscal Policy
- Payroll
- Human Resources
- Account Payable
- Student Accounts (NRA Withholdings)
- IRS publications and tax forms
- VITA
- Sprintax Calculus
