Nonresident Alien Scholarship/Fellowship Recipients
Appointment with Tax Services Required
Nonresident alien scholarship or fellowship recipients need to make an appointment with Tax Services in order to complete their required tax paperwork. Please call 581-5414 to make an appointment. The nonresident alien will need to bring the following to the appointment: social security number, passport, and visa. Do not make an appointment until you have your social security number.
The following is general information offered as a resource to nonresident alien (NRA) University of Utah scholarship/fellowship recipients. It is not to be considered as tax advice. Your individual circumstances may not be covered in this information sheet. If you would like to consult additional resources, please refer to the list at the end of this information sheet. The Tax Services Office cannot provide you with individual tax consultation.
Federal Income Tax
Nonresident Alien recipients of a scholarship/fellowship must pay federal income taxes unless such income is exempt under a tax treaty (see below.) The 14% tax withholding depends in part on whether you are a resident or a nonresident for tax purposes. Residence or non-residence for tax purposes is not the same as residence (immigrant status) or non-residence (non-immigrant status) as for immigration purposes. If you are a Resident for tax purposes, the University will not withhold taxes from your scholarship/fellowship check. If you are a Nonresident for tax purposes, 14% will be withheld unless exempt under a tax treaty. Students on an F-1 or J-1 visa who have been in the U.S. for more than five calendar years will be treated as residents for tax purposes. Non-students with J-1 visa, who have been in the U.S. for more than two calendar years, are considered residents for tax purposes. Scholarship/fellowship recipients on F-2 and J-2 visas are not eligible for tax treaty benefits. The primary purpose of the F-2 and J-2 visa holders is to accompany the “-1” visa holder, not to be a student.
An NRA’s scholarship/fellowship may be exempt from federal tax pursuant to an income tax treaty between their country of residence and the United States. For a current list of tax treaties please consult IRS publication 901 or the following website provides access to current tax treaties: Windstar Technologies. If you would like to apply the benefit of a tax treaty to your scholarship/fellowship, you must complete IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. Please make an appointment to fill out Form W-8BEN at the Tax Services office. You can make an appointment by calling 581-5414. You will need to bring your passport and visa with you to your appointment to fill out Form W-8BEN. A fully completed Form W-8BEN requires a social security number. Once you have fully completed Form W-8BEN, Tax Services will verify the information and keep it on file. This form will remain valid until a change in circumstances makes any of the information on the form incorrect.
If a change in circumstances makes any of the information on the form W-8BEN incorrect, you must notify us within 30 days.
Federal Tax Return
All NRAs present in the United States under an F, J, M, or Q visa must file a federal tax return, even if they had no U.S. source income. In the tax return you compute the actual income for the year and the exact amount of taxes owed and compare that to the amount of taxes withheld by the payee. You either pay additional taxes to the government or request a refund from the government based on the difference between the amount owed and the amount actually paid. Federal tax returns are generally due for the calendar year by April 15 of the following year. NRA’s file tax return Form 1040NR or 1040NR-EZ. Once an NRA becomes a resident alien for tax purposes, they are entitled to file Form 1040, 1040-EZ or 1040A. However, if an NRA becomes a resident for tax purposes and still is entitled to treaty benefits, they must file Form 1040NR to claim the treaty benefits.
Utah State Tax
Each state makes its own rules on the taxation of individuals and businesses. Some states have no income tax and others have tax systems that are quite different from the federal system. Utah has an income tax that starts with the federal adjusted gross income. Therefore, if you have a federal tax treaty that exempts all of your income from tax, generally you will owe no Utah income tax. The Utah State Tax form you would complete is the TC-40.
Tax Statement Issued by the University
If you are a nonresident alien and received a scholarship or fellowship, you will be issued a 1042-S tax statement from the University. It will be issued by March 15th of the year following your payment. The form will also include any tax withholding. The amount on Form 1042-S is necessary to complete your Federal 1040NR or 1040NREZ and Utah State TC-40.
You may wish to consult the following resources in order to gain further understanding of your tax situation:
Analysis of current tax treaties – Windstar Technologies
You can print forms from these websites:
Publication 4, Student’s Guide to Federal Income Tax
Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporation
Publication 519, U.S. Tax Guide for Aliens
Publication 901, U.S. Tax Treaties
Publication 970, Tax Benefits for Education – see Chapter 1, Scholarships/Fellowships
Volunteer help for completing tax forms is available mid-February to mid-April. Go to Beta Alpha Psi , VITA, for their schedule.