CU's International Tax Office wants to inform international students that their U.S.-sourced scholarships and stipends may be subject to tax withholding and/or reporting.
Student bursar accounts are routinely reviewed for taxable scholarship. This includes:
1) U.S.-sourced scholarships in excess of tuition and mandatory fees, after tuition waivers and credits are applied;
2) Any amount of housing, including resident advisor credits; and
3) Any amount earmarked for travel.
When a taxable scholarship is identified, tax equaling 14% of the nonqualified amount is charged to the student’s bursar account and the student is notified, via email, of the amount due. The tax is sent by the university to the Internal Revenue Service (IRS) as a credit toward the student’s annual tax liability. Students should contact their campus Bursar Office with questions related to payment due dates and penalties for late payment.
Individuals eligible for tax exemption through a treaty between the U.S. and their country of tax residency, who have completed the required forms with an international tax specialist, are not subject to this withholding. Both taxable and tax treaty-exempt nonqualified amounts are reported on Form 1042-S, which is issued to students after the close of the tax year for use in filing their personal income tax returns. Please access the International Tax FAQ for more information about filing income tax returns.
Non-wage stipends paid on a biweekly or monthly basis through the payroll system are also taxable at 14% and/or reportable when provided to international nonresidents. All international students and scholars who will be paid through the payroll system are required to schedule a ‘new employee’ or ‘stipend recipient’ appointment with the International Tax Office as soon as possible so the proper withholding or exemption can be applied. Appointment availability may be delayed during busy times of the semester.
Questions regarding taxable scholarships and stipends can be emailed to International Tax.