In general, all amounts paid to Nonresident Aliens in the form of scholarships, fellowships, grants, and financial aid are 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 holding F, J, M, or Q visas are subject to withholding at only 14% of the taxable portion of the grant because such individuals are considered to be engaged in a U.S. trade or business.
Those portions of a scholarship, fellowship, or grant which are used to pay tuition, fees, books, supplies, or equipment are not taxable under section 117 of the Internal Revenue Code if the recipient is a candidate for a degree. Any portion of the scholarship, fellowship, or grant over and above the five items mentioned above is taxable. For non-degree candidates, the entire grant is taxable.
Each semester the UNCP Controller's Office will notify the NRA if he/she has taxable payments from a scholarship, fellowship, or grant. Also, the amount of tax to be withheld will be shown and posted to the NRA's student account in the Cashier's Office. If there are questions regarding the taxable amounts or the tax withheld, the NRA should contact Jacqueline Strickland, at (910) 521-6284. (E-mail: firstname.lastname@example.org)
Any NRA grantee who claims that part or all of his/her scholarship, fellowship, or grant is exempt from taxation because of a tax treaty must file Form W-8BEN with the UNCP Controller's Office. That form may be obtained from the Controller's Office located in Lumbee Hall.
The NRA must have a U.S. Social Security Number or an Individual Taxpayer Identification Number (ITIN). This number is required so that the University can file the required documents with the appropriate office of the Internal Revenue Service and to other taxing authorities such as the North Carolina Department of Revenue. Also, the number must be used by the NRA when filing annual Income Tax Returns.
The taxable portion of a scholarship, fellowship, or grant and any tax withheld will be reported to the NRA on a Form 1042-S following the end of each calendar year. That information will be used by the NRA when filing his/her annual Federal Tax Return (Form 1040-NR).
If there are questions, you may contact: Jacqueline Strickland at 910.521.6284 or email@example.com.