General Rules for Scholarship Payments to Non-immigrants
It is the responsibility of George Mason University to report and withhold tax on non-qualified scholarships and fellowships for non-immigrants whose tax status is nonresident alien (NRA).
The scholarship or fellowship grant is subject to tax based on the Nature of the Payment and the Tax Status of the Recipient. Please see Scholarship Procedures for Foreign Nationals for details.
Determine the Nature of the Payment
Qualified Scholarship or Fellowship (Nontaxable)
- An amount paid and used for tuition and fees required for enrollment or fees required to attend an accredited educational institution and required course-related fees such as books and supplies.
Non-Qualified Scholarships or Fellowships (Taxable)
- An amount paid and used for anything such as travel, room and board, equipment and supplies that is not required for courses.
Payments of taxable scholarships or fellowships to nonresident aliens are reportable to the IRS.
Prize/ Award
- An amount given to, or for the benefit of an individual based on a past accomplishment or activity. Generally, it is subject to a 30% withholding rate.
Exceptions:
- The scholarship is neither reportable nor subject to the U.S. tax withholding if the scholarship is from sources outside the United States.
- The scholarship paid by a resident of the United States to a nonresident alien who conducts their study, training, or research outside of the United States is considered to be a foreign source grant and is not reportable to the IRS and is not subject to withholding of Federal income tax.
Tax Status of the Recipient
| Payment Type and Recipient | Withholding and Reporting | Withholding and Reporting, if Tax Treaty Benefits Available |
|---|---|---|
| Qualified Grant –Any Recipient | None | None |
| Nonqualified Grant – Nonresident Alien in F-1, J-1, M-1, or Q-1 status |
14% Tax withholding Reporting on 1042-S IRS form |
Tax Treaty withholding rate Reporting on 1042-S IRS form |
| Nonqualified Grant – Nonresident Alien in any other status |
30% Tax withholding Reporting on 1042-S IRS form |
Tax Treaty withholding rate Reporting on 1042-S IRS form |
| Nonqualified Grant – Resident Alien | None, but may be reportable on the student’s side | Reporting on 1042-S IRS form |
| Nonqualified Grant – Recipient’s tax status unknown |
30% Tax withholding Reporting on 1042-S IRS form |
N/A |
Process the Scholarship Payment
The Department requests scholarship payment following standard university procedures.
Documents Required:
- Follow the instructions for the corresponding type of Scholarship or Fellowship located on the Pay Students web page.
- Submit the Award Letter
- Review the Scholarship Procedures for Foreign Nationals for additional requirements