Transcript Information for Departments Li Chang Wong University of Washington, Student Fiscal Services Email: [email protected] Phone: 206-221-2621

Information for Departments
Li Chang Wong
University of Washington, Student Fiscal Services
Email: [email protected]
Phone: 206-221-2621
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Agenda
U.S. Resident Taxes
•
•
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Hope and Lifetime Tax Credits
Tuition and Fees Deduction
Departmental Scholarships, Fellowships and Grants
Form 1098T
Non U.S. Resident Taxes
• Departmental Scholarships, Fellowships and Grants
• Form 1042S
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Hope Tax Credit
• The credit increased to $1,800 per
eligible student in 2008
• Only for first two years of
undergraduate program
• Must enroll at least half time
• Must be enrolled for at least one
academic period of the year
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Lifetime Learning
• Up to $2,000 tax credit per year
(20% of total payment of $10,000)
• Available to all students and all
programs
• For an unlimited number of years
• Credit and non-credit classes
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Student Can Claim a Tax Credit
• If the student pays qualified
education expenses
• The student’s MGI is under
$58,000 for a single person or
under $116,000 if you file a joint
return
• To claim the credit, use form
1040A or 1040
• To calculate the tax credit, use
form 8863
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Student Cannot Claim Tax Credits
• Student’s filing status is married filing
separately
• Student is listed as a dependent in the
exemptions section on another person’s
tax return
• Student’s income is over $58,000 for
single and over $116,000 for marriedjoint return
• Student or student’s spouse was a nonresident alien for any part of 2008 and
the non-resident did not elect to be
treated as a resident for tax purposes
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Tuition & Fees Deduction
• Taken as an adjustment to income
• Available if your income is too high to
take either the Hope or Lifetime
• Income limit is $80,000 for single and
$160,000 for married
• Maximum deduction amount is $4,000
• To claim:
• Use Form 8917 to calculate
• Report on Line 34 on Form 1040
• Report on Line 19 on Form 1040A
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Qualified Education Expenses
Per IRS regulation, qualified
education expenses are:
tuition and tuition-related fees
for enrollment or attendance
at an eligible educational
institution
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Non-Qualified
Education Expenses
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•
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•
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Insurance
Room & Board
Travel
Research
Clerical Help
• Medical Expenses
(including student health fees)
• Transportation
• Similar personal, living
or family expenses
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Important Information
 Due date is April 15, 2009
 State sales tax can be claimed
• Read publication 600 for more
information
 Exemption is $3,500 per person
Standard deduction is $5,450 for
single and $10,900 for married couples
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Prizes, Awards and Stipends to
U.S. Citizens & Resident Students
1. The money will affect students’ financial aid
status and can affect a student’s tax credit.
When departments award money in SDB, the
UW does not withhold tax.
2. When departments award money in the SDB
system, the Financial Aid Office will receive all
the income information to determine the needs
of students when they apply for financial aid.
3. Prizes, awards, and stipends are taxable income.
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Departmental Scholarships,
Fellowships, Grants
A scholarship or fellowship is tax
free when:
• the money is paying for
qualified education expenses
AND
• the student is working
towards a degree
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1098T form for the Hope &
Lifetime Learning Credit
• UW generates a 1098T form to all UW and
Extension students
On-line printing available from web site
www.washington.edu/students/sfs/sao/maintax.html
• Summarizes all the tuition and fee charges
• Summarizes scholarship, fellowship and
financial aid money for students
• Helps students determine if they qualify for
tax credit
• Non–Resident Alien Students do not qualify
and will not receive the 1098T form
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UW Form 1098T
UW reports tuition charges on IRS form Box 2. UW
does not report payment information
• Box 2 – total of qualified tuition and fees expenses
• Box 5 – total of scholarship or financial aid grants.
When the student compares box 2 to box 5:
If box 2 total is greater than box 5 total, student
will qualify for a tax credit
If box 5 total is greater than the box 2 total,
student will have to report the difference in the
amount as income
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UW Form
1098T
Student Information
Hope and
Lifetime Learning
Tax Credits
Box 2
Box 5
Difference
-
$6,534
0
$6,534
Amount Eligible for Tax
Credit Calculation is $6,534
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Student Information
UW Form
1098T
Hope and
Lifetime Learning
Tax Credits
Box 2
Box 5
Difference
$22,494
- 8,452
$14,042
Amount Eligible for Tax Credit
Calculation is $10,000
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Student Information
UW Form
1098T
Scholarship
Income
Box 2
Box 5
Difference
$ 7,894
- 9,039
-$1,145
Amount Eligible to Claim as
Income $1,145
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Student Information
UW Form
1098T
Stipend
via Payroll
Box 2
Box 5
Difference
$ 6,624
- 22,620
-$15,996
Amount Eligible to Claim
as income is $15,996
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IRS Form
1040
To report
scholarship
income:
line 7 “sch”
If filing electronically, the program
may ask questions and
automatically fill in the form(s)
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Line 50
To report
tax credits
from form 8863
IRS Form
1040 – Back
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IRS Form
1040A
To report
scholarship
income:
line 7 “sch”
If filing electronically, the program
may ask questions and
automatically fill in the form(s)
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Line 31
To report
tax credits
from form 8863
IRS Form
1040A -Back
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To report
scholarship
income:
line 1 “sch”
IRS Form
1040EZ
If filing electronically, the program
may ask questions and
automatically fill in the form(s)
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IRS Form
1040EZ –
Back
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Electronic Filing
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For a no-hassle, paperless, environmentally friendly
1098T, encourage students to sign up to “Opt Out”
of receiving the paper 1098T form. Student Fiscal
Services will send the student an email as soon as
the 1098T is on their MyUW page!
For more information go to:
http://f2.washington.edu/fm/sfs/tax/student
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For more information
•IRS web site: www.irs.gov
•Hope, Lifetime, Scholarships:
IRS Publication 970
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Non U.S. Resident Taxes (NRA)
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Prizes, Awards and Stipends to
Foreign Students
1. Prizes, awards and stipends given to nonresident alien students are taxable income
except when the payment is used to pay for
tuition charges.
2. Awards to foreign students in SDB may
generate a tax liability.
3. If the award is greater than $3000 in a quarter,
SFS will withhold tax at 14% prior to
disbursement to student.
4. Contact SFS with questions before authorizing
award in SDB.
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The SDB system will not accept the
UW EID#. When award payments
are made in SDB, we need to have
at least one of the following:
•student name,
•student number,
•SS#.
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Social Security Number
(SSN) or Individual Tax
ID Number (ITIN)
• Contact the Office of International Students & Scholars
(ISS) in room 459 Schmitz Hall
• Review the following ISS Website to check your eligibility
and the procedures for applying for an SSN
– http://iss.washington.edu/admin/ssn.html
• If the student does not qualify for an SSN
– Contact the UW ISS Office before emailing
[email protected], or visit:
www.washington.edu/admin/payables/tax/itin2.html
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U.S. Source of Income for
Taxable Scholarship or
Fellowship Grants
1. Paid to F, J, M, and Q visa holders
2. Subject to withholding at a rate of
14% to the extent that the amount
awarded exceeds tuition charges
3. All other income is Subject to
withholding at a rate of 30%
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W-8Ben
To claim a tax treaty
benefit, an NRA student
must file this form with
the Payroll Office and
the Student Fiscal
Services Office.
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Form
W-8Ben
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1098T Tax Form
• Non-Resident Alien students
do not qualify for Hope or
Lifetime Learning tax credits.
• They will not received the
1098T tax form.
• The exception is someone who
elects to file their tax return
as a resident alien.
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1042-S
Will receive a 1042-S for:
Scholarship or financial aid money that
is in excess of tuition charges AND
U.S. source of funds
Will not receive a 1042-S for:
Aid money paying tuition & fees only OR
Not U.S. source of funds
May receive multiple forms in a year
for each type of income
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1042-S
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For information regarding non-student awards:
http://www.washington.edu/admin/finmgmt/globalsupport/
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For more information
• IRS web site: www.irs.gov
• Nonresident Alien Taxes
IRS publication 515
• U. S. Tax Guide for Aliens
IRS publication 519
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http://f2.washington.edu/fm/sfs/tax/student
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For Frequently Asked Questions
UW student tax website
http://f2.washington.edu/fm/sfs/tax/student
Other Questions?
Send email to:
[email protected]
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