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Financial Affairs
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Tax Accounting
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Non-Service Stipend - FAQ
Georgetown University (GU) is changing the manner in which it processes
non-service stipend payments. Effective January 1, 2003, all non-service
stipends will be processed through the Accounts Payable system. Taxes
will not be withheld on these payments nor will they be reported to the
Internal Revenue Service (IRS). It is important to note that these
payments may be taxable to the recipient. Please review the Frequently
Asked Questions (FAQ) that follows:
Q
Why is GU changing the way my payment is processed?
A
Based on a review of its policies and procedures GU made revisions
to ensure compliance with IRS regulations.
Q
Is my stipend taxable?
A
If you receive a service stipend, GU treats the amount as taxable wages,
taxes may be withheld and you will be issued a W-2.
If you receive a non-service stipend, the amount is taxable unless the
funds are used to pay for tuition, books, fees, supplies and equipment
required of all students in your courses. However, per IRS
regulations, GU will not withhold taxes, nor will we report the amount
to the IRS.
Q
How do I know what type of stipend I am receiving?
A
This should be stated in your award letter. Please contact your
departmental administrator if you do not have your award letter.
Q
If my non-service stipend is not being reported to the IRS, why should
I report it to the IRS?
A
Because unless the amount is used to pay for tuition, books, fees,
supplies and/or equipment required of all students in your courses, it
is taxable income. Additionally, should the IRS audit GU, it
may examine documentation for stipends awarded to ensure compliance.
Q
Will GU let me know how much I received?
A
Yes. In January you will receive a letter stating how much you
received in the previous year.
Q
Do I need to do anything before I file my tax returns?
A
As taxes will no longer be withheld, you may be required to make estimated
tax payments. The requirement to make estimated tax payments varies
from individual to individual depending on facts and circumstances.
Please visit http://www.irs.gov/pub/irs-pdf/f1040e02.pdf
(for estimated Federal Tax Payments), http://forms.marylandtaxes.com/current_forms/502d.pdf
(for estimated Maryland Tax Payments), http://www.tax.state.va.us/
(for estimated Virginia Tax Payments), and http://cfo.washingtondc.gov/services/tax/forms/frames/forms1.shtm
(for estimated DC Tax Payments).
Q
Where and when should I report my taxable stipends?
A
The stipend should be reported when you file your federal and state
income tax returns. Please visit the following sites to determine
if and when you are required to file a return: http://www.irs.gov/pub/irs-pdf/p17.pdf
(Federal Income Tax), http://individuals.marylandtaxes.com/taxbook/instpages/determine.asp
(Maryland Income Tax), http://www.tax.state.va.us/web_pdfs/indForms/2001/760instructions.pdf
(Virginia Income Tax), and http://cfo.washingtondc.gov/services/tax/forms/frames/forms1.shtm
(DC Income Tax).
Q
What type of records should I keep to support amounts spent on tuition,
required books, fees, supplies and equipment?
A
Your student accounts record may contain such information for tuition
and required fees. Additionally, canceled checks and receipts will
substantiate such expenses as well as required books, supplies and equipment.
Non US Citizens Please Note:
The filing and reporting requirements of Scholarships & Fellowships for Non US Citizens are different. Please contact the tax office to inquire about your individual situation.
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Tax Accounting