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Taxation Guidelines for Students Receiving Graduate Assistantships

Taxation Guidelines for Students Receiving Graduate Assistantships 

American University wishes to provide the following guidelines about taxes concerning the stipend provided to graduate students as part of their graduate assistantship. The university requires that the graduate student work in order to receive the stipend. The amount of stipend received is considered by IRS as compensation for services performed and is taxable, and subject to tax withholding by the university. 

To ensure compliance with IRS tax withholding requirements, American University must withhold federal income tax on any taxable stipend disbursed to students. FICA and Medicare taxes may be withheld although these taxes are generally exempt for students who are enrolled at least half-time (4.5 graduate credits hours per semester).  

Graduate students can maximize the amount of money that they receive on their regular paychecks through adjustments to their declared withholding allowances. The university staff members are not tax professionals and cannot provide tax assistance. However, the information found at the websites provided below will assist you in making an informed decision regarding the withholding of taxes. Your withholding exemptions can be changed at any time by printing, completing and sending the form to the Payroll office. We have included a link below to the federal W-4 withholding form. Your form will be processed based on the regular payroll schedule deadlines. To review the payroll deadlines please go to the HR/Payroll Connection system in the my.american.edu portal. Once you have signed into HR/Payroll Connection then click on Info/Forms - Payroll/Taxes – Monthly Payroll Schedule.  

Often the state agencies follow the same requirements as the IRS. If you are changing your federal withholding, you may wish to also change your state withholding. We have also provided links to DC, Maryland and Virginia Withholding Tax forms.  

This site has an IRS Withholding Calculator that you may wish to use to figure your federal income tax withholding. Once you calculate the withholding, you will need to complete a new W-4 form and send to the Payroll office as soon as possible. Completed forms can be faxed to Payroll at (202) 885-1033 or sent as .pdf files to the Payroll via email account at payroll@american.edu or via campus mail addressed to the Payroll Office. 

Publication 970 Tax Benefits for Education
This publication explains tax benefits that may be available to you. It also explains the tax treatment of various types of educational assistance, including scholarships, fellowships, and tuition reductions.

Link to DC’s site for individuals for information about their taxes here.

Link to Maryland’s site for individuals for information about their taxes here.  

Link to Virginia’s site for individuals for information about their taxes here.

Withholding Forms:  

Federal Tax Form “Employee’s Withholding Allowance Certificate” W-4 form

District of Columbia Tax Form “Employee Withholding Allowance Certificate”

Maryland Tax Form “Employee’s Maryland Withholding Allowance Certificate”

Virginia Tax Form “Employee’s Virginia Income Tax Withholding Exemption Certificate”

If you have any questions regarding tax forms, please contact the Payroll Office at X3514 or send email to payroll@american.edu.