MSTP students are solely responsible for filing their taxes. Stipends are subject to federal income tax, as they do not cover tuition, fees, or required education materials.

BRIEF OVERVIEW OF Traineeships or Fellowships

For the stipend part of the payments:

  • Student files federal/state quarterly taxes (1040ES/540ES) or student increases withholding on other salaried income
  • Student receives no Wage and Tax Statement (W-2) from UAB
  • Fellowships are exempt from FICA (social security tax)
  • Student positively reports taxable amount as "SCH" on 1040EZ/1040A/1040 (Refer to the "Fellowship and Scholarship Grants" instructions for Line 1, Wages (1040EZ) or Line 7, Wages (1040A) or Line 7, (1040)).

Graduate Student Traineeships

Awards with monthly stipend payments, usually the funding source is some sort of training grant.

Stipend awards: Any portion of a fellowship in excess of tuition, fees, and required books and equipment is subject to federal income tax (i.e. your stipend).  UAB does not withhold taxes from stipends or issue W-2 forms. Students must self-report the taxable amount.  Useful tax information can be found in IRS Publication 970: http://www.irs.gov/publications/p970/index.html (Tax Benefits for Education - especially look at Scholarships and Fellowships – towards the bottom of this part it tells you what line to enter your stipend amount, and how to code it depending on the tax form you are using).

Tax Withholding Form: Generally, students have to make estimated tax payments if they expect to owe tax of $1,000 or more when you file your return. Use Form 1040-ES, Estimated Tax for Individuals, to calculate and pay the estimated tax (and Alabama State Form 40-ES).

Additional Resources:

CAUTION – AVOID TAX PENALTIES: Federal 1040 instructions state that you may be assessed a tax penalty when filing your return if you “owe at least $1,000 and it is more than 10% of the tax shown on your return or you did not pay enough estimated taxes by any of the due dates.”

Graduate Research Assistantship

Awards with monthly salary payments, usually the funding source is some sort of research grant.

Stipend/Salary Awards:  This will be taxable and you will get a Wage and Tax Statement (W-2) from UAB. The fee/tuition payments provided by the assistantship are not taxable and not reported by the University as income on a W-2 or 1099 Form.

Tax Withholding Form:  At UAB, you will complete a "W-4" form to instruct Payroll how much in Federal and State Income Tax should be withheld from each paycheck. (Note: Only the top copy of the W-4 needs to be submitted to Payroll; the attached worksheets are designed to assist you in determining the number of exemptions to claim).  You can submit to your employing department a revised W-4 form to reflect and life changes at any time.

BRIEF OVERVIEW OF UAB Assistantships

For your salary part of your payments:

  • Student completes W-4 for federal/state tax withholding
  • Salary subject to Student FICA (social security) if not registered in a minimum of 3 units.
  • Student receives UAB W-2 for filing of tax returns 

Please review "A Tax Guide for the MSTP Student" by Sotirios Keros, MD, PhD for specifics concerning Graduate-Training related taxes.