However, the tax law does require withholding of taxes on fellowships for those fellows who are nonresidents for tax purposes. For U.S. citizens, permanent residents and all other fellows who are listed in the payroll computer system as residents for tax purposes, the Rutgers payroll does not withhold taxes. Information and forms needed to make these payments on a quarterly basis may be obtained at any Internal Revenue office. The United States has tax treaties with 39 countries. Although there are certain basic similarities among them, the treaties vary in significant ways in the benefits they offer, the types of income covered, the total amount of the exemption, and the number of years one can claim the benefit.
Different treaties exempt different types of income.
The existence of a tax treaty with your country does not automatically mean you do not have to pay taxes. Rutgers withholds tax on your earnings unless you you hold a regular appointment at the university AND you make a claim stating that your income is exempt by treaty. The Center for International Faculty and Student Services has copies of IRS Publication 901 which gives details about all existing tax treaties between the U.S. and foreign governments. The staff of the center does not interpret the treaties for you, however. For a full analysis you must consult a tax accountant or your consulate.