Most postdoctoral fellows receive fellowship payments. Fellowship payments are educational grants paid to individuals in the pursuit of study or research. Fellowship payments are not compensation for services.
Information from the Johns Hopkins University Tax Office: Important Tax Considerations
Fellowship payments are labeled as such on your pay stub. Your payment may also include salary/wages if you are being compensated for services in addition to your fellowship. The pay stub includes the fellowship amount for that check as well as the year-to-date amount until the fellowship ends.
For US citizens and resident aliens, fellowship payments ARE NOT reported to you on IRS form W-2 or 1099. You must use your last pay stub to indicate total yearly pay.
For nonresident aliens, fellowship payments are reported on IRS form 1042-S. More information for International Students can be found here.
- Fellowship payments are NOT subject to FICA taxes (Social Security and Medicare taxes).
- Generally, fellowship payments are NOT subject to TAX WITHHOLDING for federal or state income tax. The University cannot withhold taxes. HOWEVER, fellowship payments ARE TAXABLE INCOME. The payments should be considered in preparing your income tax return. See IRS Publication 970 entitled Tax Benefits for Education. NOTE: For individuals who are classified as nonresident aliens, fellowship payments will be subject to tax withholding unless the payments are exempt from tax under a US tax treaty.
- It is your responsibility to make any required ESTIMATED FEDERAL and STATE/LOCAL INCOME TAX PAYMENTS QUARTERLY (1st quarter due April 15th, 2nd due June 15th, 3rd due September 15th, 4th due January 15th). NOTE: In Maryland, you can also use the MD tax calculator to figure out your estimated taxes, which you will need to pay quarterly: http://www.marylandtaxes.com/onlineservices/default.asp
To obtain Form 1030-ES for estimated Federal income tax payments, go to www.irs.gov. If you are living in Maryland while receiving your fellowship, go to www.marylandtaxes.com and look for Maryland form 502-D. If you are living in another state, contact that state’s tax office or website to obtain its forms and information. If you have questions, please call the University Tax Office at 443-997-8688 or email email@example.com.
Overview of Tax Issues for Postdocs: http://www.nationalpostdoc.org/?page=TaxIssues
IRS Guide for Foreign Students and Scholars: https://www.irs.gov/Individuals/International-Taxpayers/Foreign-Students-and-Scholars
Beginner’s Guide to Income Taxes for International Postdocs: http://www.nationalpostdoc.org/?page=SurvivalGuide_Tax