Scholarships & Fellowships

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 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.

  • Nonqualified 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 his or her 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 his 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

Prepare the Scholarship or Fellowship Request

The Department prepares the Request for Scholarship or Fellowship Payment and sends it to International Tax Office in Fiscal Services, 4400 University Hall, MS 4B2.

Documents Required:
  1. Follow the instructions for the corresponding type of Scholarship or Fellowship located on the Pay Students web page.
  2. Submit the Award Letter
  3. Review the Scholarship Procedures for Foreign Nationals for additional requirements

 

For Questions: