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Fellowship Guidelines / Tax Considerations
Noncompensatory Support
Noncompensatory student financial support includes ASU-awarded scholarships, fellowships, grants, and noncompensatory stipends, including tuition and registration fee waivers, for which the student is not required to perform any type of service, including research-related services, internships or other participation. For example, the award of a graduate student's tuition waiver cannot be contingent on his or her performance of duties as a teaching assistant. If the student is required to perform services of any kind, payment must be made through the ASU payroll system or, on a limited basis, as an independent contractor. The ASU tax compliance liaison (480/965-8479) is available to provide assistance in resolving questions regarding whether services are being required for a particular scholarship, fellowship, grant, stipend, or waiver.
Income Tax Considerations
All awards, scholarships, fellowships, grants, and stipends to ASU students for which no services are required, whether paid through Student Financial Assistance or directly by a department, are taxable nonemployee income to the recipient, except for the portion of these funds used for tuition, registration, other university fees, books, supplies, and equipment required for the course(s) being taken. The recipient is responsible for determining the value of tuition, registration, other university fees, books, supplies, and equipment.
Although the university is not required to provide reporting to the Internal Revenue Service (IRS) on noncompensatory student financial support, students are encouraged to collect relevant information on their awards (and eligible expenses for offset) on an ongoing basis throughout the year in order to be able to easily evaluate the potential for taxable income. Information on the taxability of scholarships and fellowships is included in class schedules for each semester. Additional information on the taxability of scholarships can be obtained from the following IRS publications and forms:
Additional Guidance and Requirements
For additional guidance on university and IRS requirements relating to fellowships, scholarships, and student cash awards, including tuition waivers, access the Financial Services website, www.asu.edu/fs.
Noncompensatory student financial support includes ASU-awarded scholarships, fellowships, grants, and noncompensatory stipends, including tuition and registration fee waivers, for which the student is not required to perform any type of service, including research-related services, internships or other participation. For example, the award of a graduate student's tuition waiver cannot be contingent on his or her performance of duties as a teaching assistant. If the student is required to perform services of any kind, payment must be made through the ASU payroll system or, on a limited basis, as an independent contractor. The ASU tax compliance liaison (480/965-8479) is available to provide assistance in resolving questions regarding whether services are being required for a particular scholarship, fellowship, grant, stipend, or waiver.
Income Tax Considerations
All awards, scholarships, fellowships, grants, and stipends to ASU students for which no services are required, whether paid through Student Financial Assistance or directly by a department, are taxable nonemployee income to the recipient, except for the portion of these funds used for tuition, registration, other university fees, books, supplies, and equipment required for the course(s) being taken. The recipient is responsible for determining the value of tuition, registration, other university fees, books, supplies, and equipment.
Although the university is not required to provide reporting to the Internal Revenue Service (IRS) on noncompensatory student financial support, students are encouraged to collect relevant information on their awards (and eligible expenses for offset) on an ongoing basis throughout the year in order to be able to easily evaluate the potential for taxable income. Information on the taxability of scholarships and fellowships is included in class schedules for each semester. Additional information on the taxability of scholarships can be obtained from the following IRS publications and forms:
- Publication 4-Student's Guide to Federal Income Tax,
- Publication 520-Scholarships and Fellowships,
- Publication 519-U.S. Tax Guide for Aliens,
- Form 1040EZ and Instructions-Income Tax Return for Single and Joint Filers with No Dependents, and
- Form 1040NR and instructions-U.S. Nonresident Alien Income Tax Return.
Additional Guidance and Requirements
For additional guidance on university and IRS requirements relating to fellowships, scholarships, and student cash awards, including tuition waivers, access the Financial Services website, www.asu.edu/fs.