International students who are recipients of a Brown University Scholarship and/or any outside scholarships should review the Student Account Financial Policy and this important information regarding the potential tax implications.
Student Financial Services
Taxation for International Students
Tax Withholding and Exempt Status Considerations
Section 117 of the Internal Revenue Code exempts scholarships from taxation as long as the scholarship does not exceed the amount of eligible tuition charges. To comply with federal regulations, Brown University is required to withhold tax on excess scholarship amounts equal to any scholarships, fellowships, grants, and financial aid in excess of eligible tuition charges. Eligible tuition charges include tuition and fees, books, supplies, and equipment (not room and board).
International students are subject to a 14% federal and 3.75% state withholding rate on the taxable portion of the scholarship/fellowship/grant. Taxation may be avoided if the student's country of residence has a tax treaty with the U.S which exempts their scholarship from taxation (reference Publication 901 for U.S. Tax Treaties).
Students who claim that part or all of the scholarship is exempt from taxation because of a tax treaty must enter their specific data pertaining their immigration and tax status into a computerized database, Sprintax Calculus. Unless this information is entered and submitted in Sprintax Calculus, an accurate assessment of a student's tax status and possible tax treaty eligibility cannot be made and taxes will be assessed.
Excess Scholarship Tax
U.S. tax laws require that the University withhold tax on excess scholarship equal to any scholarships, fellowships, grants, and financial aid in excess of eligible tuition charges.
Transactions described as Excess Scholarship Federal and State Withholding Tax may appear on your student account during the academic year. The transactions represent the tax charged on the scholarship amounts that exceed your eligible charges.
Tax is calculated based on:
- Total of Scholarships, Fellowships, Grants
- Less: Required Tuition & Fees Charged to Your Student Account (room, meals, or travel are not included)
- Equals: Taxable Portion of Your Award
Impact on Student Account
Excess Scholarship Federal and State Taxes may be assessed and posted to the student account at any point throughout the academic year. The transactions represent the tax charged on the scholarship amounts that exceed your eligible charges.
Tax Documents
Excess Scholarship Tax will be reported to the student on a 1042-S – Foreign Person’s U.S. Source Income Subject to Withholding Statement. Brown University is also required to report the excess to the Internal Revenue Service (IRS) on Form 1042-S. International students who receive taxable income while in the United States may need to file a 1040NR or a 1040NR-EZ. Please visit the IRS website for details.
Questions
Visit the resources available for SPRINTAX-Calculus.
Taxation or Sprintax Requirements
Email foreignnationaltax@brown.edu or oisss@brown.edu.