From the FAQs

Stipends may be considered taxable income. Fellows may find it helpful to consult the US Internal Revenue Service (IRS) Tax Topic 421: Scholarship and Fellowship Grants and Publication 970: Tax Benefits for Education. These are available on the IRS website. Specific questions regarding the taxation of Fellowship funding and personal tax liability should be referred to the IRS.

Fellows are not, in any sense, considered salaried employees of Penn State. Penn State will not withhold tax from the stipend or pay any additional amounts, such as Social Security Taxes nor issue a W-2 or 1099 Form to U.S. residents related to fellowships. Fellows bear the responsibility of filing and paying any taxes due.

If a student is a Non-U.S. Resident (for tax purposes), the University is required by law to withhold 30 percent of federal income tax from the fellowship payment. However, federal income tax withholding can be eliminated if your country of permanent residence has a tax treaty with the United States, and you complete the treaty form W-8BEN. Contact the Payroll Office by email at payroll@psu.edu to request access to SprinTax Calculus software if you haven’t done so already. This will allow the Payroll Office tax team to apply the W-8BEN to your fellowship correctly once all your information has been completed on your Calculus record.

Fellowship income and tax withholding (if applicable) for non-U.S. residents will be reported to the IRS on a form 1042-S, an electronic copy of your 1042-S can be accessed through SprinTax Calculus. Once forms are available, you will receive an email from Calculus with instructions as well as a link to the Calculus site.

Please contact the Payroll Office by email payroll@psu.edu if you have any questions or need additional information.

Penn State cannot counsel you on personal income taxes and does not offer any resources to help students with their taxes. Please contact an outside tax vendor/service for assistance. One potential option is the Volunteer Income Tax Assistance Program (VITA). VITA is a nationwide, IRS-sponsored volunteer program that provides free tax preparation services.