What is Considered Taxable Income?

Nonresidents for Tax Purposes are taxed only on their U.S. income. With a few exceptions, this means that any income received from outside the U.S. is not considered taxable in the U.S. Residents for Tax Purposes are taxed by the U.S. on their income from anywhere in the world.

Sources of U.S. income may include on-campus employment, scholarships, fellowships, graduate assistantships, practical or academic training, awards, and any compensation received for labor.

While any portion of a scholarship, fellowship, or assistantship that is applied to housing or meal expenses (non-qualified expenses) is considered taxable income, the portion applied directly to tuition, fees, and books is not taxable (qualified expenses).

However, please note that if scholarship money is provided directly to the student by check or cash, it is fully taxable even if the student intends to use it to pay for tuition, fees, and/or books.