Graduate Study Manual

Income tax Regulations

The income tax liability of students is determined by the Internal Revenue Service (IRS) and the State of Illinois Department of Revenue (IDR) and not by the University. Taxability of Fellowships and Assistantships is discussed in Graduate College Handbook.

Tax Liabilities:

Any person who expects to pay at least $500 income tax is required to make estimated tax payments or to have appropriate amounts withheld from salaries or stipends. Generally speaking, 90% of the expected tax liability must be paid in this fashion, and penalties are assessed if insufficient amounts are paid during the year. Instead of making estimated tax payments, fellows may arrange with the University Payroll Office to have appropriate amounts withheld as income tax from their fellowship stipends. Income taxes are withheld from assistantship salaries automatically, and no further action is usually required. However, student assistants on non-immigrant visas are taxed as non-residents (and thus somewhat differently from U.S. residents). The U.S. also has tax treaties with many countries, and these treaties affect the tax liabilities of fellows or assistants who are citizens of these countries. In such cases, the assistant may arrange with the Payroll Office for increased (or reduced) withholding that will more closely approximate the estimated tax liability.

For further information, consult various IRS publications, such as:

  • Publication 17 - Your Income Tax
  • Publication 505 - Tax Withholding and Estimated Tax
  • Publication 519 - U. S. Tax Guide for Aliens
  • Publication 901 - U. S. Tax Treaties
  • Publication 970 - Tax Benefits for Education
  • Publication 970 - Scholarships and Fellowships

All of these publications are available free of charge from the IRS website. The local public libraries generally keep copies.