Fellowships and Grants
Introduction
This page describes the procedures for complying with the federal income tax treatment of payments made through Accounts Payable for non-compensatory grants and fellowships awards. For federal tax purposes, a fellowship award is generally defined as “an amount paid or allowed to, or for the benefit of, individuals to aid them in their pursuit of study or research” (Treasury Regulation §1.117-3(c)).
To qualify as a non-compensatory fellowship, the primary purpose of the fellowship must be to further the education and training of the recipient in his or her individual capacity with no requirement on the recipient's part to perform substantial services on behalf of the College. In addition, payments will qualify as a fellowship provided that the College, as grantor, will obtain no benefit, or only incidental benefit, as a result of the fellowship. This includes fellowship stipends, housing allowances, and reimbursed thesis, travel and independent research expenses.
If the College will receive more than incidental benefit or substantial services are required, the payment will be treated as compensation for services performed and must be processed through Payroll. Examples include fellowships and grants awarded to students to support faculty research and certain internships, including related housing allowances. For more information on housing allowances, please see below.
Process
Before submitting a payment request to Accounts Payable for a fellowship awarded to a current student, you must first determine whether the student is an international student subject to the nonresident alien tax rules and if so, whether they are eligible and have claimed treaty benefits. If the status is unknown, the request may be forwarded to Nancy Robinson in Financial Aid at narobinson@amherst.edu to make that determination. For questions related to the tax status of graduate students, please contact Laurie Bouchard in the Controller’s Office at 542-8494 or by email at lmbouchard@amherst.edu.
- US citizen/resident alien student - A Request for Student Payment form must be submitted to the Controller’s Office to request payment. All applicable areas of the form must be completed in order to process the request.
- Non-resident alien student - A Request for Student Payment form must be submitted to the Controller’s Office to request payment. All applicable areas of the form must be completed in order to process the request. In addition, a Foreign National Information Form and a W-8BEN, if applicable, must be completed for each nonresident alien who has not previously completed one for Payroll or Financial Aid, to enable us to determine the proper treatment of the fellowship. Please refer to the Policy for Granting a Fellowship Award to an International Person for more information.
Federal Tax Reporting
Although a fellowship award may be taxable to a recipient who is a U.S. citizen or resident, the College is only required to report to the IRS, awards used for support while enrolled and attending Amherst College, with total scholarships on IRS Form 1098-T, Tuition Statement. However, all fellowships (including expense reimbursements and the value of room and board) awarded to international recipients (who are not U.S. residents) are subject to special federal income tax withholding and reporting rules unless they are applied directly to qualified tuition for degree candidates OR are used for educational purposes outside the U.S. Please refer to the Policy for Granting a Fellowship Award to an International Person for more information.
Housing Allowance
As previously indicated, housing allowances follow the same treatment as the fellowship award or grant. If the related fellowship award is classified as a fellowship, the housing allowance is also classified as an additional fellowship award. If a housing allowance is provided to allow a student to work on campus while they are not enrolled in classes, the value of the housing is generally considered additional taxable compensation.