U.S. Tax Withholding on Payments to Foreign Nationals

All payments made by the University to or on behalf of an individual must be reviewed to determine the U.S. tax residency status of the payee or beneficiary. The Internal Revenue Service (IRS) requires income tax withholding on payments of U.S. source income to foreign persons under IRC §§1441–1443 (reported on Form 1042). This includes student awards paid to nonresident aliens (NRAs) in the form of scholarships, fellowships, grants, and certain types of financial aid. 

GLACIER – International Tax Compliance

Ohio University partners with Arctic International, LLC to provide GLACIER, a secure web‑based international tax compliance system. GLACIER collects the information required to determine:

• Tax residency (resident alien vs. nonresident alien)
• Eligibility for tax treaty benefits
• Applicable withholding rates

More information is available about Glacier at the Ohio University Payroll Services website.

Resident Aliens

Students classified as resident aliens for U.S. tax purposes are treated the same as U.S. citizens when receiving scholarship, fellowship, or prize payments through student accounts. No income tax withholding is required on these payments.

• Scholarship and fellowship payments are reported on IRS Form 1098-T, Tuition Statement.  These payments are self‑reportable, meaning the individual is responsible for reporting the income and paying any applicable taxes when filing their annual tax return.
• Prize or award payments made to resident aliens are considered taxable income and are reported on IRS Form 1099‑MISC, Miscellaneous Income. As of 2026, Ohio University issues Form 1099‑MISC to individuals who receive at least $2,000.00 in prize or award payments during the calendar year.

Nonresident Aliens

Payments made to or on behalf of a nonresident alien are generally subject to income tax withholding unless:

• The payment is applied to qualified educational expenses, or
• The individual qualifies for an income tax treaty exemption.

If the University cannot determine the tax status of a foreign national, the maximum withholding rate applies (generally 30%). 

Scholarship Taxability and Withholding Calculation – Student Account

The applicable tax withholding rate based on the student’s tax status and visa classification. Typical rates: 14% for F/J/M/Q visa holders receiving taxable scholarship income; 30% for other nonresident aliens or when tax status cannot be determined. 

Qualified Tuition and Related Expenses
Qualified fees include the instructional fee, the general fee, the nonresident fee, technology fees, course fees, books, supplies, and equipment that are required for courses that are charged on the student account.

Non‑qualified expense items include, but are not limited to:
Room and board, insurance, medical expenses (such as student health fees), transportation/parking, travel, equipment and other expenses that are not required for enrollment, and personal expenses.

Direct Scholarships

Direct scholarships are payments made directly to students that do not apply to qualified tuition or fee charges. These include support for travel/research or emergency microgrants.

These payments are subject to income tax withholding unless:

• A tax treaty exemption applies, or
• The funds support documented travel or research outside the U.S. (foreign‑source income is not taxable). 

Prizes and Awards

Payments to students for charitable, scientific, educational, artistic, literary, or civic achievement are treated as prizes.

• Withholding rate: 30%
• Tax treaties generally do not apply to prizes or awards

IRS Form 1042‑S

Form 1042‑S, Foreign Person’s U.S. Source Income Subject to Withholding, is issued to nonresident aliens to report:

• Scholarship or fellowship payments
• Taxable portions of awards
• Tax treaty exemption amounts

The University reports these payments annually as required by the IRS.