Overview: Tax Considerations for Students
On this page:
- Important Disclaimer
- Regulations for Taxation of Financial Support
- Graduate Financial Support (GFS) Payment and Taxes
- Tax Forms for Students to File with Governmental Agencies
- Tax Forms Sent to Students from Stanford
- Substantial Presence Test
- U.S. Tax Treaties
- Tax Resource for International Students
- Where to Get Assistance
The items presented here are for general information only and do not constitute tax advice. The University does not endorse nor independently confirm the information presented in any other website referred to in this document. The University encourages users of this page to seek qualified tax counsel when appropriate.
Regulations for Taxation of Financial Support
- Fellowship stipends paid to non-U.S. residents are subject to a 14% withholding, regardless of the number of dependents.
- Non-U.S. residents may be eligible for tax exemption on fellowship stipends and/or assistantship salaries if their country of residence has an existing tax treaty with the US. Reference How To: Claim Tax Treaty for Fellowship Payments and How To: Claim Tax Treaty for Salary Payments in the Students - Tax Information section.
- Fellowship funds used to pay for tuition, books, and fees which are required for enrollment may be excluded from the income reported. Money used to pay for these items may not be subtracted from wage income.
- Students will receive a W-2 form covering Stanford salaries, including assistantships. They will not receive a tax statement of fellowship stipends. Any fellowship received in excess of tuition and fees required for enrollment (health insurance, ASSU fees and document fees) is taxable for the recipient.
Graduate Financial Support (GFS) Payment and Taxes
For degree-seeking (matriculated) students, the tuition portion of fellowships and assistantships is exempt from tax. Nonmatriculated students are subject to tax on any tuition support received.
Fellowship stipends and assistantship salaries are considered taxable for the recipient. The tax obligation varies according to the student's total income, dependency status, treaty status for international students, and individual circumstances.
Tax is not withheld from student quarterly fellowship stipends or postdoctoral schlolar / non-matriculated monthly fellowship stipends paid to U.S. citizens and Permanent Residents. The recipient is responsible for making any estimated tax payments.
Federal tax is withheld from student quarterly fellowship stipends or postdoctoral schlolar / non-matriculated monthly fellowship stipends paid to non-U.S. residents. Residents of certain counties may be able to claim a tax treaty benefit for reduced federal taxation. The recipient is responsible for making any estimated tax payments for California.
Tax Forms for Students to File with Governmental Agencies
Tax forms for students to file at calendar year-end with the IRS and California Franchise Tax Board include:
- U.S. citizens and residents should file the federal Form 1040 and the California State Form 540.
- Non-U.S. residents should file the federal Form 1040-NR and the California State Form 540 (Non-U.S. residents are considered residents by the state of California for tax reporting purposes).
Simpler versions of tax forms such as the 1040-EZ or 1040-NR-EZ may be used when circumstances permit. Information for these forms may be found at the following sites:
Tax Forms Sent to Students from Stanford
- The University is required by the Internal Revenue Service (IRS) to file an annual Tuition Statement (IRS Form 1098-T) for each student who is a U.S. citizen or permanent resident pursuing a degree, and for whom a reportable transaction is made, e.g., tuition, student activity fees and any scholarships or grants received. A copy of the 1098-T is mailed to the student in January each year. For more information, see Resources: How to Read Your Stanford Annual Tuition Statement (Form 1098-T) and Frequently Asked Questions.
- For wages (paid twice a month), a W-2 will be sent annually, at the end of January, by the Payroll Department.
- For prizes and awards, IRS Form 1099 will be sent annually, at the end of January.
- Many non-U.S. residents will receive form 1042-S, each year in late March, reporting fellowship amounts received, taxes withheld and payments not taxed due to a treaty exemption.
Substantial Presence Test
International students will be considered U.S. residents for tax purposes when they meet the substantial presence test for the calendar year. To meet this test, students must be physically present in the United States on at least:
- 31 days during the current year, and
- 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting:
- All the days you were present in the current year, and
- 1/3 of the days you were present in the first year before the current year, and
- 1/6 of the days you were present in the second year before the current year.
In general, F-1 and J-1 students are exempt from counting days toward Substantial Presence for their first 5 calendar years in the U.S. and J-1 postdoctoral scholars are exempt for their first 2 calendar years in the U.S.
To determine whether or not you are a non-resident alien, use the Substantial Presence Test.
U.S. Tax Treaties
To determine whether or not a tax treaty exists between your country and the U.S., see How To: Claim Tax Treaty for Fellowship Payments or How To: Claim Tax Treaty for Salary Payments in the Students - Tax Information section.
Tax Resource for International Students
For assistance with tax withholding, tax treaty and tax form issues, submit a HelpSU request (Category: Financial Management, Type: Payroll). Payroll will respond within 1 business day.
Where to Get Assistance
For assistance with tax withholding, tax treaty and tax form issues, submit a HelpSU request (Category: Financial Support, Type: Payroll). Payroll will respond within 1 business day.
International students at Stanford are encouraged to attend one of the tax workshops held at Bechtel International Center in March or April. These workshops cover the mechanics of filling out the required forms for non-residents. See Federal Tax Help-Sheet for Non-Residents at Bechtel International Center web site.
Anyone needing advice or interpretation of tax law should consult a competent tax counsel or attorney.