If you have been awarded a scholarship from sources in the United States, including the University of Northern Iowa (UNI), you may have a taxable scholarship.
Pursuant to U.S. tax law, the total of scholarships you receive from U.S. sources that exceed tuition and required fees, books, equipment, and supplies are taxable as a nonqualified scholarship. This taxable nonqualified scholarship amount would result in UNI having to reduce that portion of your cumulative award that exceeds tuition and mandatory fees by a 14% tax charge on your U-bill labeled “1042-s tax.”
However, certain countries have treaties with the U.S. under which you may avoid this tax withholding. You are eligible to claim a tax treaty benefit if you are an international student, present in the U.S. on a F-1 or J-1 visa, and were a resident of one the following countries immediately preceding your arrival in the U.S.:
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*Note: Commonwealth of Independent States (C.I.S.) countries include Armenia, Azerbaijan, Belarus, Georgia, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan and Uzbekistan.
Thus, if you receive a scholarship or several scholarships that together exceed tuition and mandatory fees, and you are from one of the countries listed above you may be eligible for tax treaty benefits. You may only receive the tax treaty benefits if you have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
As an international student at UNI receiving scholarships greater than your tuition and mandatory fees, you will be contacted by the Office of Business Operations-Payroll to complete a Foreign National Information Form (FNIF). This form will assist Payroll in determining if your scholarship will be taxed and how it will be reported for tax purposes at calendar year end. It will also assist in determining if you may be eligible for tax treaty benefits.
Documents to be collected:
- Completed Foreign National Information Form (FNIF)
Form(s) to be completed:
- Form W-8BEN if claiming a tax treaty; SSN or ITIN required Form W-8BEN Individual Certificate of Foreign Status
Tax form to be issued at year-end:
- 1042-S