Student Payment Process

The student payment policy applies to all departments involved in processing student payments. It offers detailed instructions on properly categorizing and managing these transactions and ensures that all payments comply with institutional and regulatory requirements. The tax classifications outlined for the various payment types below serve as guidelines for U.S. citizens or resident alien recipients. Specific guidelines for non-resident aliens are provided afterward.

Types of Payments

Awards: These are financial support based on achievements or other criteria, not specifically designated for educational expenses. They can be for academic excellence or recognizing work performance. These are generally taxable.
Compensation for Services: Payments for teaching, research, or other work-related activities; includes Graduate Assistantships, Undergraduate Employment, and internships. These are taxable.
Qualified Scholarships/Fellowships: Funds given to students for tuition and related educational expenses. These payments are typically tax-free.
Non-Qualified Scholarships/Fellowships: Funds used for expenses not related to tuition or required educational materials, such as room and board. These are generally taxable.
Prizes: Payments for participating in contests or competitions, like design or writing contests. These are generally taxable.
Research Scholarships/Fellowships: Funds provided for independent research during periods of non-enrollment. Typically, these payments are not reportable.
Stipends: Fixed amounts are paid periodically to cover expenses or for services; these are generally taxable.
Reimbursements: Payments for pre-approval and legitimate university business expenses incurred by students; not typically subject to tax reporting.

Processing Payments

The Financial Aid Office handles payments for enrolled students not related to services.
The Payroll Office processes payments for services.
The Accounts Payables Office handles payments during non-enrollment periods.

Before processing, departments need to determine the payment's primary purpose, the student's enrollment status, and their tax status.

Student Payment Questionnaire
Student Payment Method Decision Tree (docx)

Finance Policies: Student Payment Process

Payments to Non-Resident Aliens

Non-resident aliens are subject to taxation on any income earned while in the U.S., which includes funds received from aid, scholarships, fellowships, awards, prizes, stipends, or income from employment while residing in the U.S.

However, certain exemptions may apply. For example, non-resident aliens with F-1 or J-1 visa statuses may be exempt from FICA (Social Security) taxes. Additionally, non-resident aliens with these visa types may qualify for a federal tax exemption if their country of residence has an income tax treaty with the U.S. that specifically covers the type of payment they receive while visiting.

All non-resident alien payees must submit their immigration information to the Payroll Office through Sprintax Calculus to determine tax eligibility. The hiring department or the employee is responsible for informing the Payroll Office of their visa status to ensure proper tax treatment.

Please refer to the Payments to Non-Resident Aliens for further details on processing payments to non-resident aliens (NRAs).