- A scholarship/fellowship may have both non-taxable (qualified) and taxable
- Qualified non-taxable items include:
Mandatory University Fees and Technology
Mandatory Health Insurance
- Non-qualified taxable items include:
Room and Board
Fellowship Stipend (which does not require
a service to be performed)
- The taxable portion of a scholarship is subject to 14% withholding tax
unless exempt by a tax treaty.
- Even if a scholarship or fellowship is
not paid directly to the individual, tax is still applied to
the total non-qualified amount.
- For students with taxable non-qualified scholarship
amounts, Towson University will charge the amount of
tax due to the student’s
account unless a tax treaty applies, which requires a Taxpayer Identification Number (either SSN or ITIN).
- For more comprehensive information see IRS Publication 970 – Tax
Benefits for Education: http://www.irs.gov/pub/irs-pdf/p970.pdf