Taxes

With the disclaimer that I am not a tax expert and am not offering financial advice, here’s essentially how it works:

Federal taxes aren’t withheld from stipends funded by NIH training grants, since these aren’t considered “salaries” per se (according to the NIH). However, students will owe taxes on this income in April (the IRS trumps the NIH). Students who are US citizens / permanent residents sometimes receive the majority of their funding from these sources during their first two years in the program. Stipend amounts are listed on form 1098 which you can access via MyUW.

International students and U.S. citizens / permanent residents who are not funded by training grants are generally funded via research assistant appointments either via the department or their thesis labs. Federal taxes are withheld from these salaries, so while gross pay is the same, the net salary will be less. The benefit of sorts is that you won’t have to come up with all this cash at tax time, so it all works out the same in the end.

The simplified version: Students funded by RA appointments pay taxes now; students funded by training grants pay taxes in April (or, more often, make quarterly payments). Training grant tax info is provided via the 1098T form rather than a W2.

For more help

Student Fiscal Services holds tax workshops for graduate students several times each Spring – if your funding source includes a training grant, you should definitely make time to attend one of these to save yourself some frustration in April. 1098T tax information is available on the SFS website. More tax info is available on the SFS website. You may also find these SFS tax workshop presentation slides helpful.

New: free tax preparation is offered via the UW Vita program.

IRS publication 970 spells out the rules. Their chart indicates you must pay taxes on your stipends, but not for funds spent on textbooks or other supplies.