Taxes Reporting and Grad Students

Disclaimer: Although every effort has been made to provide accurate information, we are not tax professionals and can not provide tax advice.  The University of California is not responsible for any tax liability or penalty students may incur because of the information provided by our office. The information we have provided is general and should not replace professional, Internal Revenue Service, or State Franchise Tax Board advice and assistance.

• • Federal Income Tax Return: All students must file
  • CA State Tax Return: All students must file. 

• If you reside or have worked in another state during the calendar year you may have to file in those states also.

When to file:

• File tax returns annually by April 15.
• Some students may be required to pay estimated taxes quarterly in addition to filing annual taxes (April 15, June 16, September 15, and January 15)*

The Tax Year

The tax year (the calendar year) and the academic year are very different. Students should only report the income and financial support paid during the tax year. Students should not report the full amount of their academic year fellowship if it extends into the next tax year.

Awards for Tuition vs Living Expenses

Tuition and fee remission are generally not considered taxable income because they are Qualified Education Expenses. Neither are student loans. See Qualified tuition reduction | Internal Revenue Service for details.

In general, if you are a degree candidate (enrolled in a degree program at UC Berkeley), the portion of your fellowship/scholarship used to pay for tuition, fees, and related required course expenses (required of all students) is excludable from your gross income and not considered taxable. Please refer to the appropriate section in IRS Publication 970 (Tax Benefits for Education) for the related definition.

If any portion of your scholarship/fellowship/scholarship/stipend (either UC or external) is NOT used to pay for tuition, fees, and related required course expenses, it is probably considered taxable. Please use Worksheet 1-1 of IRS Publication 970 (Tax Benefits for Education)  to figure the amount of a scholarship or fellowship grant you can exclude from gross income.

Quarterly Taxes on Fellowships and Grants

U.S. citizens and residents for tax purposes (permanent resident, refugee, or asylee) do not automatically have Federal or State taxes withheld from their nonexcludable fellowship payments. If you are a U.S. citizen or resident for tax purposes, you may be required to make estimated quarterly tax payments directly to the IRS or California Franchise Tax Board on the portion of your graduate ‘gift aid’ (fellowships, grants, etc) that is not used for tuition and fees; see IRS Publication 505.

Employment Income

ASE/GSI/GSRs, work-study, and other student employees receive a W2 wage and tax withholding. This means that the University has already paid taxes on your behalf throughout the year on this income and you need to file annual taxes to report it and make sure you paid the right amount. You may receive a refund or owe additional taxes depending on your situation and how much was withheld.
This same process applies to off-campus employment: in that case, you will receive a W2 from your employer.

International Students

International students (F-1 and J-1 visas) have specific tax filing requirements. This is done through the campus Glacier Tax Compliance System and must be completed before the University may issue such payments. Some fellowship income for international students is subject to 14% withholding. See: Tax Reporting Requirements | Berkeley International Office. 

Dependent Students

Students under age 24 may be considered dependents on their parent/guardian’s tax return and should not file an additional return.

Student Employees

Your W2 will become available at tax time (typically beginning in February) on UCPath website. You must sign up to receive your W2 electronically. If you do not consent to electronic delivery, paper copies will be delivered by campus mail to your department address, or–for separated and inactive employees–sent via US Mail to the individual’s permanent address in the Personnel and Payroll System.

Fellowships, Grants, Scholarships, and Stipends

Fellowships, scholarships, and grants will be reported to you on a 1098-T. By January 31, you should receive an email notification from UC Berkeley indicating your 1098-T form is available online via the TAB Services website. For more information, please visit the TAB Services website or call TAB Services Customer Support toll-free at (888) 220-2540. Please be sure to keep your email address on CalCentral current. Login help: Accessing Your 1098-T Form Online | Student Billing.

Stipends may be reported to you on a 1098-T in Box 5, on another form, or not at all. Understanding your IRS Form 1098-T | Student Billing. 1098-T forms are to inform you of the student financial support payments you received from UC Berkeley, but they may not include all of your income from these sources. Double check your 1098T against the “my finances” section of your CalCentral profile. If your actual income differs from what is reported on the 1098-T, you should list your actual income. Contact Cal Student Central about any discrepancies you see.

FAQ: https://studentbilling.berkeley.edu/faq/form-1098-t-tax-benefits 

Note: the 1098-T you receive from UC Berkeley will not include scholarships, fellowships, and grants paid directly to you by non-University sources; however, you are still responsible for reporting them on your income taxes.

Deductions

Graduate students who pay their fees and tuition from their own personal resources (rather than by a grant, fee remission, etc), may be able to claim a Lifetime Learning Credit or an education tax deduction for their qualified tuition and related expenses.

Students are not eligible for the ‘Saver’s Credit’ which provides you with a tax credit for contributions to a retirement plan.