The University does not withhold taxes or report your fellowship, training grant, or scholarships on a Form W-2. However, unless the amount is a qualified scholarship received by an individual who is a candidate for a degree, the scholarship is considered taxable income to you.
The term qualified scholarship means any amount received by an individual as a scholarship or fellowship grant to the extent the individual establishes, in accordance with the conditions of the grant, such amount was used for educational expenses.
Although the University does not have a withholding or reporting obligation for these payments made to US citizens, permanent residents, or resident aliens, any amount that is not a qualified scholarship is taxable income to the recipient. The recipient is required to report all taxable income on their 1040 form and quarterly IRS payments may be required. This includes grants to pay for room and board or medical insurance. Additionally, if a non-employee receives medical benefits, the insurance value of those benefits is an additional grant and is taxable income. Failure to report such income on federal, state, or local tax returns could result in the assessment of penalty and interest charges on the income.
For additional information on determining your potential federal tax obligation, please refer to IRS Publication 970, Chapter 1, Scholarships, Fellowships, Grants, and Tuition Reductions.
The state of Pennsylvania does not require the University to withhold taxes or report these payments, however, these payments may be taxable to the individual. Recipients can find further guidance Under 61 Pa. Code §101.6(b)(5).
If your pay statement reflects that you received other compensation for services performed during the calendar year in addition to your fellowship or training grant, these earnings will be reported to you on a Form W-2.
If you receive multiple different payment types and/or transfer to a different position throughout the calendar year, please review this additional taxation information.
Postdoctoral scholar payments are not reported on a Form W-2; however, postdoctoral scholars may receive a Form W-2 with no wage or tax information. The only information reported would be in Box 14 with code DD. This is correct as only the information listed in Box 14 with code DD is Form W-2 reportable.
Foreign nationals can review additional foreign national taxation information for postdoctoral scholars, predoctoral fellows, and trainees.
Review more year end information on the payroll website.