Tax reporting content for UC Davis students
For non-resident students and scholars
- Student wages maybe exempt from FICA. Please review the description in the FICA Codes Table
- I want to award a scholarship to an active student. How do I do this?
The appropriate process to pay scholarships to active students is through Banner. Please work with the Financial Aid & Scholarships Office by completing the Request to Pay Form online. Select the form for the appropriate student level for the form to route appropriately. If a scholarship for an active student is submitted through the university financial system, it will be returned to the department and delay the delivery of the funds to the student.
- When does the University report fellowships for scholarships?
- The answer is dependent on the residency of the recipient.
United States citizens, Permanent Residents or Resident Aliens – The IRS does not require the university to report scholarship or fellowship grants for United States citizens or resident aliens; however, under IRC Section 117, the determination of whether a scholarship or fellowship grant must be reported to the IRS by the recipient is based on whether the grant (or a portion of the grant) is qualified or non-qualified and whether the recipient is a degree or a non-degree candidate. IRS Topic No. 421 Scholarships, Fellowship Grants and Other Grants provides specific guidance on expense categorization and recipient reporting requirements.
Nonresident Aliens - Under IRC Section 1441, the University must report income and withhold Federal income tax from all income payments made to or on behalf of a nonresident alien unless the payment is excluded under specific IRS code exemptions. The most common exemption is a tax treaty. All persons receiving payment from the University who are in the US on a Visa must complete Glacier registration. Upon completion of Glacier, the payee will be advised if there are tax treaties available.
Absent regulatory exclusions, non-wage payments made to a nonresident alien that has been determined to be taxable are subject to income tax withholding at a 30% rate. However, a special 14% rate applies to any taxable scholarship or fellowship grants paid to F or J visa holders. Income subject to tax treaty exclusions and / or the 30% or 14% withholding are reported on the annual 1042-S form, Foreign Person's U.S. Source Income Subject to Withholding. The IRS has a dedicated page for Foreign Students and Scholars.
- I receive fellowship and wages from the University. How are these different? How are they reported to the IRS? How do I find the tax forms?
- Student payments from the University can be complex and confusing to track. Please review the Student Payment Description document.