Review this page for tips and information for filing your federal tax return.
- When you file your tax returns, keep a signed copy of all returns and schedules.
- Use the 1040-ES, Estimated Tax for Individuals form (found on the IRS website) to estimate amount of tax you may owe.
- Review Publication 970 – Tax Benefits for Higher Education (found on the IRS website) 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 (found on the IRS website) before you complete your Federal and state taxes.
Teaching, Graduate Assistants and Research Assistants
Teaching, Graduate Assistants and Research Assistants will need to 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).
Below are some of the more commonly asked questions about taxes. If your question is not answered below, please contact TGS Financial Aid staff for more information.
US and Permanent Resident Fellowship and Scholarship Recipients
Is a tuition award taxable?
The tuition portion of University fellowships and University scholarships that is paid directly to the student’s account is tax free and does NOT have to be reported. If you are receiving a scholarship, the amount equal to your tuition cost is tax exempt under current regulations. Any amount which exceeds your tuition is considered taxable and needs to be reported.
Is a stipend taxable?
The stipend portion of the University fellowship is taxable. Follow the directions for reporting scholarship and fellowship grants as indicated in your tax return instruction booklet. It may be beneficial to obtain Publication 970, Tax Benefits for Higher Education, from the Internal Revenue Service or by calling 800/829-3676.
Does Northwestern issue W2s or 1099s?
Northwestern will not issue a W2 or 1099 for registered students receiving University fellowships 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. It is the responsibility of the student to report appropriate stipend amounts to the Internal Revenue Service. Obtain Publication 970, Tax Benefits for Higher Education, from the IRS or by calling 800/829-3676.
Does Northwestern withhold federal or Illinois taxes for a stipend?
The University will not automatically withhold federal or Illinois taxes from your fellowship stipend, even if you have filed W4 forms for federal or Illinois claiming any exemptions. You must request the Payroll Office (720 University Place, Evanston), at 847/491-7362 or email@example.com to withhold a specific dollar amount each month on the appropriate W4 form.
Are any stipend expenses deductible?
For the period of the fellowship, students may deduct from the stipend expenses for books, supplies and equipment required for courses and required fees. For example, if you received a stipend of $4,000 and you spent $1,000 on books, you would report $3,000 on your tax return. You must be able to show appropriate documentation for these expenses if asked.
My fellowship is for the academic year. How do I claim taxes?
For example, if you receive a University fellowship for the academic year (not including summer quarter), you should report the amount you receive from your September, October, November and December stipends (after you have made the allowable deductions) on that year’s federal and state tax returns. The following year, you will need to report your January, February, March, April and May stipends (after you have made the allowable deductions).
How does the academic year affect reporting of fellowship stipends?
Since the academic year crosses different calendar years, the W2 will reflect earnings on a calendar-year basis. For instance, you may receive a University fellowship from September to May in your first academic year. For the first calendar year (ending that December), you would not receive a W2 showing fellowship earnings, but the stipend you received from September to December is taxable income for that year. You then may be paid as a teaching assistant or research assistant from September to December of your second academic year. For the second calendar year, Northwestern would issue you a W2 reflecting only your assistantship earnings from September to December. Your fellowship stipend from the previous January through May would not be reported on your W2, but you will need to include it, along with your assistantship earnings, in the taxable income you report to the IRS and the state of Illinois.
Do I have to file an Illinois state tax form?
You must report any funds received in the state of Illinois on an Illinois tax return, regardless of your state of residency. Visit the Illinois Department of Revenue website to obtain forms.
What if my permanent residency is in another state?
Illinois has reciprocal agreements with several bordering states, so you may report your income on either state’s form. In Illinois, you will be taxed only on the income received in Illinois. Report your income using state form IL-1040NR. If you are a resident of another state, please refer to that state’s tax regulations concerning your liability. The Illinois Department of Revenue website offers links to all other state revenue departments.
Teaching, Graduate and Research Assistants
How are assistantship taxes handled?
The Internal Revenue Service treats assistantships differently from fellowships. You are not permitted to deduct books, supplies or fees from the amount you report to the IRS or the state. Your entire earnings as a teaching, graduate or research assistant will be reported to the IRS and Illinois.
Will Northwestern issue a W2?
The University will issue a W2. If you do not have a W4 on file, Northwestern will treat you as single having zero exemptions. Therefore, the maximum amount allowable in taxes will be withheld.
What do I do when I am appointed to an assistantship?
You should complete W4 federal and Illinois withholding forms, because the University is required to withhold taxes from your stipend checks. Federal and Illinois W-4 forms are available on the Payroll Office's website. If you do not have a W4 on file, Northwestern will treat you as single having zero exemptions. Therefore, the maximum amount allowable in taxes will be withheld. The completed W4s should be submitted to the Payroll Office, 720 University Place, Evanston, telephone 847/491-7362.
Do international students pay federal income tax?
Unless you are eligible for a US treaty agreement, Northwestern withholds 14 percent of your fellowship stipend for federal tax purposes. Your research and teaching assistantships are taxed based on your filing status and exemptions claimed. The Payroll Office can provide you with further information and the appropriate forms for Nonresident Aliens. Payroll Office: 720 University Place, Evanston, 847/491-7362, firstname.lastname@example.org.
How am I notified of my earnings and withholdings?
As international students receiving scholarship earnings or claiming a treaty for earned wages, you will receive a 1042-S form for the calendar year. The 1042S forms are distributed to you by the 15th of March in the following calendar year. You should not file your 1040NR form with the Internal Revenue Service until you have received your 1042-S form for the year. If you are receiving assistantships earnings, you should receive a W-2. W-2 forms are distributed to you by the last day of January in the following calendar year. If you do not receive one or both of these forms, contact the Payroll Office (720 University Place, Evanston), at 847/491-7362 or email@example.com.
How do I report this income?
Complete the federal form 1040NR, which includes submitting a copy of your award letter detailing the terms of your award. Internal Revenue Service Publication 519, US Tax Guide for Aliens, may be helpful. Questions concerning taxes should be directed to the IRS or by calling 800/829-3676. Questions concerning tax treaty agreements should be directed to the Payroll Office (720 University Place, Evanston), at 847/491-7362 or firstname.lastname@example.org.