Nonresident Alien Non-Service Scholarship Fellowship Traineeship Recipients

(Revised 5/18)

GLACIER is required:

Glacier: Online Nonresident Alien Tax Compliance System GLACIER is a secured web-based Nonresident Alien (NRA) tax compliance system that foreign visitors can use to provide their immigrant and tax data to the University of Utah via the internet 24 hours a day. GLACIER helps determine tax residency, withholding rates and income tax treaty eligibility. GLACIER also manages NRA’s paperwork, maintains NRA’s data and prepares tax forms and required statements.

Nonresident Alien recipients of a scholarship/fellowship are required to complete a GLACIER record: 

• Enter information into GLACIER within seven (7) days of receipt of the email from (this is not spam).
• Print, review, sign and date all forms (Tax Summary Report, W-8 Ben, 8233, etc.) created by GLACIER.
• Forward signed forms with the required tax documents as instructed on page two (2) of the Tax Summary Report.

Introduction

The following is general information offered as a resource to 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. Tax Services/Payroll Accounting cannot provide you with individual tax consultation or help you complete your tax returns.

Federal income tax

A scholarship is a payment made to, or for, the benefit of a student, either graduate or undergraduate, to aid the individual in his course of study.

• A qualified scholarship is an amount received as a scholarship grant that covers tuition, fees, books, supplies and equipment required for instruction at the education institution. No withholding or reporting is required. 
• A nonqualified scholarship is an amount issued for any other purpose, including travel, room, board, research, etc. This amount is subject to federal tax withholding and reporting.

NRA recipients of a nonqualified non-service scholarship/fellowship must pay federal income taxes unless such income is exempt under a tax treaty (see below.) The 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 (F, J, M, Q visas) 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.

Tax Treaties

An NRA’s payroll earnings may be exempt from federal and state income 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. The existence of a tax treaty does not automatically ensure an exemption from tax withholding; rather, you must meet the requirements for the exemption outlined in the tax treaty and provide all required GLACIER forms and Immigration documents listed on their Tax Summary Report.

*Please note that an individual can either take the treaty benefits with the University of Utah or on their own tax returns at in the following year. In other words, if the University of Utah cannot facilitate a tax treaty due to some requirements are not met; the individual can claim it in their tax returns.

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 your employers. 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 which 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 which 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 Statements 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. Form 1042-S: This form is issued by March 15th in GLACIER.

Additional Resources

You may wish to consult the following resources in order to gain further understanding of your tax situation:
Internal Revenue Service
Utah State Tax Commission
IRS Publication 4, Student’s Guide to Federal Income Tax
IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporation
IRS Publication 519, U.S. Tax Guide for Aliens
IRS Publication 901, U.S. Tax Treaties
IRS Publication 970, Tax Benefits for Education – see Chapter 1, Scholarships/Fellowships

Please note that the Tax Services Dept. cannot provide individual tax consultation. NRAs will receive an instruction email from the International Student & Scholar Services (ISSS) in January about Sprintax software. Please visit ISSS website for information. Please note that you will need Form W-2 and/or Form 1042-S to complete your income tax returns. You may receive one OR both of these forms. It is also possible to receive more than one 1042-S Form. For example, if you received wages/compensation type payments and non-service scholarship/fellowship type payments you will receive a 1042-S for each type of income.