Scholarships/Fellowships

• A scholarship/fellowship may have both non-taxable (qualified) and taxable (non-qualified) items.
  
  
  • Qualified non-taxable items include:

    Tuition
    Book Allowance
    Mandatory University Fees and Technology Fees
    Mandatory Health Insurance

    Supplies

    Equipment

  • Non-qualified taxable items include:
    
    

    Room and Board
    Fellowship Stipend (which does not require a service to be performed)
    Living Allowance
    Cash Award
    Travel Award
    

• 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