Withholding Tax for International Students

  • Payments of scholarships, fellowships, and grants paid to U.S. citizens and resident aliens are not generally reportable to the IRS and are not generally subject to withholding of tax. However, payments of taxable scholarships, fellowships, and grants to nonresident aliens are generally reportable to the IRS and are generally subject to withholding of U.S. Federal income tax.
  • In general, the taxable portion of a scholarship or fellowship paid to a NONRESIDENT ALIEN is subject to Federal income tax withholding at the rate of 30%, unless the payments are exempt from tax under the Internal Revenue Code or a tax treaty. However, payees who are temporarily present in the United States in F-1, J-1, M-1, Q-1, or Q-2 non-immigrant status are subject to a reduced 14% withholding rate on the taxable portion of the grant because such individuals are considered to be engaged in a U.S. trade or business under I.R.C. § 871(c).
  • In general, those portions of a scholarship, fellowship, or grant used to pay tuition, fees, books, supplies, or equipment are classified as a “Qualified Scholarship” and are not includible in the gross income of the recipient under I.R.C. § section 117 if the recipient is a candidate for a degree. Any portion of the scholarship, fellowship, or grant that does not correlate to the five items mentioned above is includible in the gross income of the recipient, which means that it is subject to withholding.  See more information at https://www.irs.gov/pub/irs-pdf/p515.pdf
  • The table below shows qualified and unqualified tuition and related expenses.  Students are taxed based on the unqualified expenses.

Some Examples of Qualified and Unqualified Charges:

Qualified Tuition and Related Expenses

Unqualified Expenses

  • Designated Tuition
  • Tuition
  • Library Access Fee
  • Information Technology Fee
  • Student Center Complex Fee
  • Student Service Fee
  • Lab Fees
  • University Services Fee
  • Scholarship Fee
  • International Student Service Fee
  • Room and Board Fee
  • Book Vouchers
  • Athletic Fee
  • Student Health Fee
  • Parking Fee
  • Late Registration Fee etc.
  • Recreational Fee
  • Nursing Liability Insurance
  • International Sponsored Fee

Amounts included in Box 1 , “Payments received for qualified tuition & related expenses”:

  • PVAMU International students must be registered in Glacier before a scholarship is given. Registering with Glacier will let the university know if there is a tax treaty with their country and to apply the appropriate tax amount. Please contact the Financial Accountant I in Treasury Services via e-mail at sldaniels@pvamu.edu or stuar@pvamu.edu  or by phone at 936-261-1945 or 936-261-1890 to get access to register in Glacier. When registering the student must select that they are receiving a scholarship/fellowship if they are receiving  a scholarship/fellowship
  • Students must also contact the PVAMU Immigration Services Associate at 936-261-1725 after being admitted to the University.