<p>My question is basically about tuition waivers. When receiving financial aid in the form of research/teaching assistanship with full tuition coverage, the stipend is considered a salary for the RA/TA position. But how would the tuition payment be regarded? Is it considered a separate grant or is it a waiver accompanying the RA/TA position?
I was just reading through the website of the office of intenational affairs of a university and i panicked. As an international student, my financial aid is liable to 14% federal taxation. According to the IRS, the part of a scholarship, fellowship, or grant given to a non-resident alien used to pay tuition and fees is not taxable. But stipends, tuition waivers, or any other financial aid paid to or on behalf of nonresident aliens which require the recipient to perform services past, present, or future, in exchange for the financial aid are taxable as wages.(<a href="http://www.irs.gov/businesses/small/international/article/0,,id=129249,00.html%5B/url%5D">http://www.irs.gov/businesses/small/international/article/0,,id=129249,00.html</a>).
So, let's say the department will pay me 35K for tuition and 25K as a stipend, if the tuition is considered as a scholarship and only my stipend is taxable, then i'll pay 3.5k /year as taxes. But if the tuition is waived in exchange of me being a TA/RA, then i'll be liable to 8.4k/yr!! This is really a huge amount.
Are there ant international graduate students here on Assistanships? Could you clarify this please?</p>
<p>As an international undergraduate student I was taxed on the part of my scholarship that was exceeding tuition but not on the tuition waiver. I would assume it's the same for graduate school.</p>
<p>yep. the tuition will not be taxed, even if the tuition waiver is part of a TA/RA package. the living stipend will be taxed, though.</p>
<p>Your tuition waiver will not be taxed.</p>
<p>As to whether your stipend itself will be taxed, the answer strongly depends on the rules of your country, and in particular, on whether your country has signed a tax treaty for students with the United States.</p>
<p>For example, I know some grad students from Portugal who attend US grad schools on stipend, and who not only don't pay any taxes back to Portugal (because Portugal doesn't care about money you make outside the country), but also don't pay any taxes to the United States either, due to an existing tax treaty. So basically, they don't have to pay any taxes to anybody. So basically what that means is that the United States actually treats Portuguese *graduate students (and grad students from the list of other countries shown below) better than it does *American grad students. How ironic is that? Why exactly is it that American grad students have to pay taxes, but (certain) foreign students do not? </p>
<p>Thanks all.
StrangeLight..i hope you are right.
Sakky..my country does belong to this list of countries but as i understand it, i don't get tax exemption unless i've received a scholarship. In case i get a TA/RA, only 3000$ from the yearly income are exempt from taxes and the rest is still liable to the 14% deduction.</p>