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Nonresident Alien Taxable Scholarships

Under Internal Revenue laws and regulations, scholarships received by nonresident aliens that exceed the amount of qualified tuition and fees are subject to 14% federal income tax withholding.  Qualified expenses include tuition and related fees such as lab fees, activity fees, etc.  Room and board charges are NOT qualified expenses.  This means that nonresident aliens who receive full U.S. source scholarships that pay all tuition, fees, and room and board will have taxable income.

Nonresident aliens who receive such scholarships will receive a Form 1042-S from Lincoln University and 14% of the taxable amount will be withheld and paid to the IRS as required.  Students from countries with which the U.S. has applicable tax treaties will not be subject to withholding but will still receive a 1042-S.

Nonresident aliens in this situation will receive the full amount of the scholarship and the 14% tax will be assessed to the student account.  Students must then pay that amount to the University.

Nonresident alien students are advised to consult with private tax specialists for tax advice.