- When you file your tax returns, keep a signed copy of all returns and schedules.
- Use the 1040-ES, Estimated Tax for Individuals form (http://www.irs.ustreas.gov/) to estimate amount of tax you may owe.
- Review Publication 970 – Tax Benefits for Higher Education (http://www.irs.ustreas.gov/) to determine if you would be eligible for a Lifetime Learning Credit.
- International students must submit a copy of their award letter or notice they have received concerning their financial award with their tax forms.
You should report your fellowship stipend to the IRS after you make deductions for books/supplies (save receipts) and required fees.
The University will not withhold Federal or Illinois taxes from your fellowship stipend unless you request the Payroll Office to withhold a specific dollar amount each month (i.e. $25/month) on the appropriate W-4 form and will not withhold taxes on your fellowship even if you have filed the Federal or Illinois W-4 forms claiming any exemptions. If you are going to receive a University fellowship for an academic year, you should report the amount you receive from your September, October, November and December stipends (after you have made the allowable deductions) on your Federal and state tax returns. Likewise, you will need to report your January through May or August stipends (after you have made the allowable deductions) when you file the following year's tax returns.
Northwestern University will not issue you a W-2 or 1099 for your fellowship stipend, unless you have requested a specific dollar amount to be withheld. In that case, only the withholding amounts will appear, not your total stipend award.
International students receiving scholarship earnings or who have claimed a treaty for earned wages will receive a 1042-S for the calendar year. The 1042-S forms are distributed to employees on the 15th of March in the following calendar year. Non-resident students should not file their 1040NR or 1040NR-EZ form with the Internal Revenue Service until they have received their 1042-S form for the year.
Obtain IRS Publication 970 – Tax Benefits for Education before you complete your Federal and state taxes.
Teaching/Graduate Assistants/Research Assistants
Complete W-4 Federal and Illinois withholding forms because the University is required to withhold taxes from your stipend checks. The IRS treats assistantships differently than fellowships--you are not permitted to deduct books/supplies and required fees from the amount you report to the IRS. Your entire earnings as a teaching/graduate assistant or research assistant will be reported to the IRS. Northwestern will issue a W-2. If you do not have W-4s on file, NU will treat you as having zero exemptions and single. Therefore, NU will withhold the maximum amount allowable in taxes. If you wish to claim exemptions, you must complete and submit the Federal and Illinois W-4 forms to the Payroll Office (720 University Place).
You may receive a University fellowship for your first year of graduate study and be paid from September 2010 - May 2011. You then may be paid as a teaching/graduate assistant or research assistant beginning in September 2011- December 2011. Northwestern will issue you a W-2 reflecting only your assistantship earnings from September 2011 - December 2011. Also, remember that you will need to report any fellowship stipend (after allowable deductions) as well as any teaching/graduate or research assistant earnings when you file your 2011 tax returns.