The Internal Revenue Service (IRS), the U.S.'s tax authority, has rules about how Tulane University (TU) must tax and report certain payments made to individuals who are not U.S. citizens or lawful permanent residents. Because of these rules, TU may be required to withhold tax from your scholarship fellowship funds, non-service required stipends, or other scholarship waivers/benefits.
This does not mean that all of your funding is automatically taxable. It means that TU must review the type of funding you receive and your U.S. tax status to apply the tax rules correctly.
Read below to learn who these rules apply to, what types of funding may be taxable, how this is reported to the IRS, and what you need to do to ensure your payments are correctly processed.
This information generally applies to Tulane students and scholars who are not U.S. citizens or lawful permanent residents and who receive certain types of funding from the University, including.
- Scholarships or Fellowships
- Non-Service Stipends (NSRs).
- Housing Scholarships
- Meal Plan Scholarships
- Health Insurance Scholarships
- Stipends for travel
Examples
Scholarship applied only to tuition and required fees
If a scholarship is applied only to tuition and required fees, that amount is generally not included in gross income and not subject to tax withholding and reporting rules.
Scholarship or fellowship with a stipend
If a scholarship or fellowship includes a stipend for housing, meals, or personal expenses, that portion is included in gross income and may be subject to tax withholding and reporting rules.
Scholarship amount exceeds tuition and required fees
If the total scholarship amount is greater than the student’s tuition and required fees, the excess amount may be subject to tax withholding and reporting rules.
Payment for teaching or research services
If a student receives payment in exchange for teaching, research, or other services, that payment considered compensation for services is subject to payroll tax withholding.
What Types of Funding May Be Taxable
The tax treatment of your funding depends on both the type of payment and how the funds are used. A scholarship or fellowship is often not entirely tax-free or entirely taxable. Instead, it can include both taxable and non-taxable portions. In general, the qualified portion of your funding is not taxable, while the nonqualified portion may be taxable under U.S. law.
Qualified expenses are costs directly related to your education. These usually include tuition, required enrollment fees, and required books, supplies, or equipment. Funding used for these expenses is generally not taxable.
Nonqualified expenses are costs not directly required for enrollment. These can include housing, meals, travel, living expenses, stipends for general support, health insurance charges or waivers, and any portion of your scholarship or fellowship that exceeds your tuition and required fees. Funding used for these expenses is generally taxable.
Because most funding packages include a mix of these expenses, it is common for only part of your scholarship or stipend to be taxed, rather than the full amount.
Amounts generally not taxable
Amounts applied to qualified educational expenses are generally not taxable. These expenses may include:
- tuition
- required enrollment fees
- required books, supplies, and equipment
Amounts that may be taxable
Amounts used for non-qualified expenses may be taxable. These expenses may include:
- housing
- meals
- travel
- living expenses
- NSR Stipends
- health insurance waivers
- any portion of a scholarship or fellowship that exceeds tuition and required fees
Why Upfront Withholding May Apply
Tulane may be required to withhold tax before the payment is issued you may not receive the full amount listed in an award or offer letter. Instead, you will receive a net amount of your award after taxes are deducted.
Under Internal Revenue Service (IRS) rules, funding that is considered nonqualified (taxable) and paid to individuals who are nonresident aliens for tax purposes is generally subject to tax withholding. This means Tulane may be required to withhold a portion of your payment before it is issued to you.
In most cases, the standard federal tax withholding rate on taxable scholarship or fellowship income is 14%, unless a tax treaty benefit applies that allows for a reduced rate or exemption.
The exact amount withheld may depend on several factors, including your immigration status, your tax residency status, the type of payment you receive, whether you are eligible for a tax treaty benefit, and whether you have completed all required tax documentation.
You can find more information about, tax residency status, GLACIER Online Tax Compliance System, Examples, and FAQs in the sections below.
Your tax residency status is not the same as your immigration status. With taxes, “resident” and “nonresident” are tax terms only. They do not change your immigration status.
Even if you are in F-1 or J-1 status, you may be considered either a:
- nonresident alien for tax purposes, or
- resident alien for tax purposes
This status is based on how long you have been physically present in the United States, not your visa type.
Why this matters
Your tax residency status affects:
- how much tax is withheld
- whether you qualify for a tax treaty benefit
- what tax forms you receive
General rule for students
Most F-1 and J-1 students are considered nonresident aliens for tax purposes during their first 5 calendar years in the United States. After that, you may become a resident alien for tax purposes, depending on your time in the U.S.
How Tulane determines your tax status
You do not need to calculate this on your own. Tulane uses the GLACIER system to determine your tax residency status based on the information you provide.
GLACIER Online Tax Compliance System
Tulane University uses the GLACIER Online Tax Compliance System to collect tax information from international students and scholars. GLACIER helps determine:
- tax residency status for U.S. tax purposes
- whether withholding is required
- whether an individual may be eligible for a tax treaty benefit
- what tax forms Tulane must collect or issues
If you are required to complete GLACIER, you will receive instructions at your Tulane email address from an email from support@onlinet-ax.net. Please note that while this is not a Tulane email address, this is an offiical communication regarding your Tulane payments and should not be ignored or mistaken as scam/phishing.
Students should complete GLACIER as soon as possible after receiving access. If GLACIER is not completed and all required documents are not submitted, Tulane may be required to withhold tax at the maximum rate permitted by law until the record is complete.
You are required to download, sign, and return the tax documents that the GLACIER system provides to you to the International Tax Office via a secure upload link. You have not completed your required steps until you receive confirmation that the International Tax Office has received your documentation.
Any tax withheld because required information or documentation was not provided cannot be refunded by Tulane University.
Required documentation
After completing GLACIER, students may are be required to print, sign, and submit forms generated by the system. Depending on the individual situation, GLACIER may provide you with the following forms as tax documentation to send to the International Tax Office such as:
- A Tax Summary Report
- Form W-4
- Form L-4
- Form W-8BEN
- Form 9233
- Form W-9
- passport or immigration documents
- Social Security Card or Individual Taxpayer Identification Number, if applicable
Please note that you may not be required to submit all of these forms. The required forms are generated by GLACIER and will be listed on your Tax Summary Report.
Tax treaties
Some students may be eligible for a tax treaty benefit, depending on their country of tax residence and the type of payment they receive. A tax treaty may reduce or eliminate tax withholding in some situations.
Eligibility for a tax treaty benefit is determined under U.S. tax rules based on the information provided in GLACIER. Treaty benefits are not available in all cases and do not apply to all payment types.
Why is a scholarship sometimes taxable?
Under U.S. tax law, the tax treatment of a scholarship depends on how the funds are used. Amounts used for tuition and required fees are generally not taxable, while amounts used for living expenses may be taxable.
Why were taxes withheld from a stipend?
Stipends often support living expenses and are not excluded from gross income. Because of this, they may be taxable under U.S. law, and Tulane may be required to withhold tax before issuing the payment.
Why were taxes withheld from an assistantship?
Payments for teaching, research, or other services are generally treated as taxable compensation.
Will Tulane automatically know whether a tax treaty applies?
Tulane uses the information entered in GLACIER to determine whether a tax treaty benefit may apply. Students should complete GLACIER fully and accurately.
What happens if GLACIER is not completed?
If GLACIER is not completed and all required forms are not submitted, Tulane may be required to withhold tax at the maximum rate permitted by law. Any excess withholding caused by incomplete information cannot be refunded by the University.
Important reminders
- Receiving funding from Tulane may have tax implications, even when the payment is described as a scholarship or fellowship.
- Amounts used for living expenses may be taxable.
- Tax withholding is based on federal law, not departmental discretion.
- Completing GLACIER promptly is important to avoid unnecessary withholding delays.
