There are no simple answers to this question. The withholding requirements vary depending on the type of payment. The following table details what payment types are subject to withholding.
Note: It is possible for a payment to be exempt from holding requirements and still be taxable to the recipient.
Payment Type | Cornell Withholding? |
---|---|
Wages | Yes. Cornell withholds federal and state income taxes using graduated rates. |
Tuition fellowships for degree candidates | No. Tuition fellowships are exempt from taxation under Internal Revenue Code. |
Other fellowship support (e.g., room, board, stipends, living allowances, awards, travel, prizes, emergency funds) | No. Cornell does not withhold taxes on fellowship support for U.S. citizens or resident aliens, even though this fellowship support constitutes taxable income to the recipient. The recipient is responsible to claim the monies. |
Student loans | No. According to the IRS, loans are not taxable income. However, there are provisions in Internal Revenue Code related to below-interest loans and debt forgiveness. |