Fellowship

Non-service payment awarded to conduct personal research, including payments for travel and the purchase of goods or services.

Gross Up for Nonemployee Income

In certain situations, where University and department policies and budgets allow, administrators may wish to “gross up” an income payment to a recipient. The desired outcome may be intended to achieve a specific “net amount”, accounting for required tax withholdings. Gross up payments incur additional expense to the requesting department’s budget, which can be significant.


Reportable income payments processed to or for the benefit of individuals, are reportable for “gross up” amounts paid. Depending on income type and payment circumstances,...

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What is the “Location of Activity” when processing a payment in Accounts Payable, and why is it important to include?

  • Generally, the location of the activity would be where a service is being performed, property is being rented, or the location where fellowship income is expected to be utilized in support of one’s scholarship or research.
  • Royalties, copyrights, and patents, such as those paid for the use of intellectual properties (i.e., industrial properties and software licenses), are considered U.S.-sourced if...
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Why didn't I receive a 1042-S tax reporting document for tax treaty benefits claimed last year, even though my fellowship/stipend/scholarship was not taxed?

Non-service fellowship income, in the absence of tax treaty benefits, is also exempt from tax withholding when paid to a resident alien. First, confirm your residency status, and only if you were a nonresident alien, last year, should you look into updating your mailing address and requesting a reprint of the document.

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Why didn’t I receive a 1042-S when I received a scholarship, stipend, fellowship, or grant?

If the Nonresident Alien Tax Office has classified you as a resident alien for tax purposes (a status based on your visa type and U.S. visa history), then you will not be receiving a 1042-S. As a resident alien, you are responsible for independently reporting your income to the U.S. tax authorities by referring to your personal pay records.

Alternatively, if your scholarship was less than your tuition and related expenses, it would have been reported on the 1098-T, not the 1042-S. Please contact the...

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Fellowship Payments

Fellowships, scholarships, and stipends are disbursed in support of personal research or studies. Such payments are often grouped together, for tax purposes, as "non-service fellowship" income, and may include "reimbursements" for travel or other incurred costs, if not deemed genuine University business expenses, i.e.in direct support of University research or scholarship.

Correctly distinguishing between fellowships and reimbursements has important ramifications for tax withholding and reporting as well as for the actual payment procedure.

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Making Payments

Use these guidelines to better understand payments to foreign individuals.

Harvard is required to follow:

  • Internal Revenue Service (IRS) regulations that govern the taxation of payments to nonresident aliens, which differ from those that govern payments to U.S. citizens and resident aliens; and
  • Regulations set by U.S. Citizenship and Immigration Services (USCIS) when making payments to certain foreign scholars and students

These regulations, which can be complicated, determine the tax status and proper procedure for...

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Payments

Whether receiving or making payments, Harvard guidelines and U.S. tax/immigration regulations will influence the end result, including how the payment will be taxed. There are various compliance issues of which to be mindful, and numerous laws by which to abide, that will collectively determine the direction one should take. Work authorization, income category, visa type, tax residency status, and tax treaty eligibility are some of the many factors that influence how a payment to a foreign national should be processed.

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Honorarium, Royalty, Prize, or Other Payment

The following are subject to a 30% tax withholding rate paid to nonresident aliens, in the absence of tax treaty benefits:

  • Honoraria, or payments made at the discretion of the University as compensation for professional services, including guest lectures. If honoraria and other performance-related payments from the University exceed $5000 per year, in the aggregate, the marginal earnings would also be subject to Massachusetts State tax of around 5.5%.
  • Independent contractor/consultant payments issued when Harvard is charged for the service....
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Stipend, Scholarship, Fellowship, or Grant

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 scholarship/ fellowship" income. This may include also health insurance paid on behalf of non-employees and "reimbursements" for travel or other expenses that have not been deemed University business expenses.

  • If a scholarship recipient is a degree candidate at Harvard University, and all or part of the award has been set aside for qualified tuition and...
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Tax Treaties and Deadlines

DEADLINE TO CLAIM *NEW* TAX TREATY EXEMPTION FOR CURRENT CALENDAR YEAR 2020: If GLACIER determines you are possibly eligible to claim a tax treaty exemption, your complete GLACIER submission must be received by our office no later than Sunday, November 29th, 2020. This deadline is necessary due to IRS annual processing requirements and the short...

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Tax Withholding on Payments

Payments from Harvard University may be subject to taxation in accordance with regulations strictly enforced by the U.S. tax authorities (IRS/MassDOR). Harvard collects, or withholds, two types of tax: Federal/State and Social Security/Medicare (FICA), liability for which is based on several factors:

  • Your U.S....
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