Stipend Information

Taxability of Stipends

Federal Income Tax

All stipend payments paid by ORAU directly to the participant are considered taxable by the U.S. federal government and should be reported annually.

Because participants are not employees, stipend payments are not considered wages and should not be reported as such. Stipend payments are payments made to you in order to help defray living expenses while you are engaged in a research participation program at NIH. For IRS purposes, these payments are considered non-qualified scholarships and fellowships (not tuition and fees). For instructions on how to report this amount on your federal tax return, refer to IRS Publication 970, Tax Benefits for Education, which you can download from www.irs.gov/formspubs or request at 1-800-829-3676.

Additional Information for Foreign Nationals: Some foreign nationals will have payments reported to the IRS and/or taxes withheld by ORAU based upon their residency and the tax treaty status with their country. Foreign nationals will receive notification of their tax status after beginning their appointment and upon any change/ incident that may affect their status. Foreign nationals for whom ORAU reports payments to the IRS will receive notification of the amount of these payments on Form 1042-S. These documents will be uploaded to your Doculivery Account on or before March 15 following the relevant tax year.

Except for some foreign nationals, participants will have no Federal tax withheld by ORAU from their stipend payments. Participants who have no tax withheld by ORAU from their payments should consider filing Form 1040-ES on a quarterly basis and paying estimated Federal income taxes; this action will help you avoid being out of compliance with Federal regulations about the timeliness of tax payments.

Participants who have no tax withheld from their stipend payment can expect to receive an annual Statement of Payments letter from ORAU. Designed to help with your tax preparation, this statement will be uploaded to your Doculivery Account by February and will include the total amount of payments made to you by ORAU during the previous calendar year.

Other Taxes

Because stipend payments are awards (not wages), ORAU does not withhold Social Security or Medicare taxes for any participant. Participants are not self-employed, and therefore do not pay self-employment taxes. ORAU also does not withhold state income tax for any participant.

For more information on state tax liabilities and how to file federal tax forms, please contact a licensed tax professional in your jurisdiction. We recommend that you provide your tax preparer with a copy of your most recent Terms of Appointment.

ORAU’s Responsibility to Withhold Federal Taxes and Report to the IRS
For U.S. Citizens and Non-Citizens Participating in its Fellowship, Scholarship and Internship Programs

Citizenship

Qualifying Condition

Withholds for Federal Income Tax

Reports to the IRS

U.S. Citizen

 

No

No

Lawful Permanent Resident (Green Card Holder)

 

No

No

Foreign national who is considered a resident for tax purposes*

Tax treaty between the U.S. and country of tax residency

No

Yes (on form 1042-S)

Foreign national who is considered a resident for tax purposes*

No tax treaty between the U.S. and country of tax residency

No

No

Foreign national who is not considered a resident for tax purposes**

Tax treaty between the U.S. and country of tax residency

No

Yes (on form 1042-S)

Foreign national who is not considered a resident for tax purposes**

No tax treaty between the U.S. and country of tax residency

Yes

Yes (on form 1042-S)

* A foreign national who meets the Substantial Presence Test and is, therefore, considered a resident of the U.S. for tax purposes

** A foreign national who does not meet the Substantial Presence Test and is, therefore, NOT considered a resident of the U.S. for tax purposes.