Stipends, scholarships, fellowships, and grants are meant to support personal research or studies.
Such income is often grouped together, for tax purposes, as "non-service fellowship" income, and may include "reimbursements" for travel or other expenses that have not been deemed genuine University business expenses, i.e. in direct support of University research or scholarship.
- If a fellowship recipient is a degree candidate at Harvard University, and all or part of the award has been set aside for qualified tuition and related expenses, the designated amount is tax-exempt.
- Fellowships issued to resident aliens (including funds that exceed tuition and related expenses) should also be exempt from tax withholding, although such payments must still be reported as "gross income" to the U.S. tax authorities when filing tax returns, and might yet be subject to taxation. No tax reporting document (including the 1042-S or 1099) will be issued by Harvard. The individual should use information from personal pay records to report this income.
- Nonresident aliens on an F, J, M, or Q visa are subject, in the absence of tax treaty benefits, to a 14% tax withholding rate on non-service fellowship income (including funds that exceed tuition and related expenses), while those on other visa types face a 30% withholding rate. In each case, some or all of the withheld taxes may be refunded when the individual files a tax return.