Qualified scholarships paid to nonresident alien (NRA) students are not reportable and not subject to tax withholding. However, the portion of a U.S. Source scholarship paid to a nonresident alien which is not for any of the purposes stated above is classified as a nonqualified scholarship, reportable on IRS Form 1042-S and subject to 14% federal income tax withholding. Examples of a nonqualified scholarship are the portion of a scholarship devoted to travel, room and board, and other living expenses.

IRS Form 1042-S

If you receive a nonqualified scholarship, the University of Iowa Billing Office will withhold 14% of your disbursement in income tax withholding. If you have 14% tax withheld, you will receive an IRS Form 1042-S in January of the following calendar year and will be required to file a U.S. Income Tax return, Form 1040NR.

More information can be found: https://www.irs.gov/forms-pubs/about-form-1042-s

Form 1042-S questions may be directed to the University of Iowa Payroll Office. payroll-nra@uiowa.edu or 319-335-2381.

Determining Your US Tax Status

If you believe that you are a resident alien for tax purposes and should not have 14% withheld, the University of Iowa Payroll Office can help you to determine your U.S. tax status. You may contact the Payroll Office to inquire about completing the Foreign National Information Services (FNIS) form. Once you complete the form, the Payroll Office will determine your U.S. tax status. If it is determined that you are a resident alien for tax purposes, the University Billing Office will refund your 14% tax withholding and your scholarship will not be reported on a 1042-S form. If you complete the FNIS form and it is determined that you are a nonresident alien for tax purposes, the nonqualified portion of your scholarship which had 14% withholding will not be refunded to you and will still be reported on an IRS Form 1042-S which will be issued to you in January of the following calendar year.

You may also qualify for a tax treaty if you have a U.S. social security number. If you would like to explore this option please contact the Payroll Office. You will be asked to complete the Foreign National Information Services (FNIS) form. After you have completed the FNIS form, the Payroll Office will be able to determine your eligibility. If you qualify for a tax treaty, the Payroll Office will work with you to process the appropriate paperwork.

FNIS questions may be directed to the University of Iowa Payroll Office. payroll-nra@uiowa.edu or 319-335-2381.