TAX INFORMATION FOR GRADUATE STUDENTS AT USC
General tax information for students is available on the Student Financial Services website. USC staff cannot provide tax advice and we strongly advise students to contact the Internal Revenue Service (IRS), and/or consult with a tax professional regarding taxes.
International students may wish to consult the Office of International Students (OIS) website which offers information about tax exemptions, tax related forms, and access to Sprintax, a tax preparation software.
Graduate Students Supported by Fellowships
The Internal Revenue Service (IRS) provides information regarding the tax treatment of fellowship awards. The IRS also provides information regarding the 1098-t form. Some education related items that are included in your fellowship may not be taxable, for example tuition remission. Other items, such as living expenses including room and board, transportation and entertainment are generally considered taxable.
While receiving a fellowship, domestic students will not receive a W-2 form. However, according to the IRS, you must report all taxable amounts whether or not you received a Form W-2. If you have taxable income from your fellowship, you may need to make estimated tax payments. For more information, see Pub. 505, Tax Withholding and Estimated Tax and the IRS help on estimated taxes.
International students (non-resident aliens for tax purposes) on fellowship receive their stipends through University Payroll Services. The stipend may be treated as taxable income by the IRS. Therefore, the university may be obligated to withhold income taxes. The amount of this tax withholding depends upon the individual circumstances of the student, including the student’s total stipend and the status of the tax treaty of their home tax residence country. Tuition remission provided to an international student on fellowship is not taxable.
Graduate Students Supported by Teaching and Research Assistantships
The stipends provided via the University Payroll Services to domestic and international students who are serving as TA’s, RA’s, and AL’s are treated as taxable income by the Internal Revenue Service. Therefore, the university may be obligated to report the income and withhold income taxes. The amount of this tax withholding depends upon the individual circumstances of the student, including total stipend, the instructions provided by the student on Form W-4, and, if an international student, the status of the tax treaty of their home tax residence country and Form 8233. Tuition remission provided to a TA, RA, or AL is not reportable or taxable.
Students Hired as Graduate Student Workers (Hourly)
The payment that domestic and international students receive as hourly graduate student workers is treated as taxable income by the Internal Revenue Service. The amount of this tax withholding depends upon the individual circumstances of the student, including total amount paid per pay period, the instructions provided by the student on Form W-4, and, if an international student, the status of the tax treaty of their tax residence country and the completion of IRS Form 8233.