Under the tax law, scholarships to degree candidates have two separate parts, a tuition part and a living expense part. The tuition part is not taxable, but the living expense part is. The tuition part includes tuition and fees required for enrollment, plus books, fees, supplies and equipment required for courses of instruction. The living expense part includes your room and board expenses, plus all other expenses that are not expressly included in the definition of the tuition piece. As it is impossible for the University to determine what each student pays for books, fees, supplies and equipment required for courses of instruction, only the amount of tuition and fees charged to your student bill will be included in this calculation.
Many foreign students come from countries that have a tax treaty with the United States.
A tax treaty takes precedence over the U.S. tax laws, so that, if the treaty exempts your scholarship from tax, you will not be charged any tax. This Form is valid for 3 calendar years and should be completed as soon as possible. If you are from a treaty country and you complete either a Form 1001 or a Form W-8BEN, then you will not be charged any tax. Although the tax treaty may exempt your scholarship from tax, you are still required to file an income tax return. A list of treaty countries is included below.