Scholarship and Fellowship ProjectsScholarship and Fellowship Projects jbarber32 Tue, 09/04/2012 - 15:48
Establishing Scholarship and Fellowship ProjectsEstablishing Scholarship and Fellowship Projects
This procedure is intended to explain the method of establishing a new scholarship or fellowship project number and account maintenance in the accounting records of the Georgia Institute of Technology.
The Accounting Services Department is charged with the establishment of scholarship and fellowship project numbers in the accounting system to allow expenditures by the Georgia Institute of Technology upon receipt of properly authorized/approved budgetary and invoicing documentation. The Accounting Services Department is also responsible for budget entry and review of expenditures incurred and payments received from donors/sponsors for scholarship and fellowship accounts. Each authorization should be initiated by an award notification from the donor/sponsor and approved by authorized personnel in the Office of Student Financial Planning and Services or other units that may control distribution of awards to the Institute. Additionally some requests are received resulting from proposals submitted through the Office of Sponsored Programs. Requests received by the Accounting Services Department without sufficient will be returned to the appropriate unit for further action.
- Upon receipt of a request for a new scholarship or fellowship project, the Accounting Services Department will assign the project number within the appropriate range of numbers (997xxxxx for Scholarships / 998xxxxx for Fellowships) and updates the accounting records of the Institute.
- If “deliverables” (e.g. progress report, financial report, etc.) or a contract/agreement mutually signed by the sponsor and the Institute (either GTRC or GIT), the award documents should first be forwarded to the Office of Sponsored Programs (OSP) for review. OSP takes necessary steps to execute the agreement and requests project assignment from the Office of Grants & Contracts Accounting (GCA).
- If a scholarship or fellowship project is to be created as a sub-project under an existing project number, the department is required to submit an online budget revision request through the Grants Management System (Establishing a Sub-Project Account). This request should include the proper department/organization number (997 for scholarships, 998 for fellowships) PI name, start/end date, project name, amount and specific explanation in remarks before submitting the revision.
- The Accounting Services Department (or GCA as required) notifies the requesting unit of the project number. This notification is the first opportunity for allowable expenditures related to the scholarship/fellowship award to be recorded to the accounting records of the Institute.
- Requests for payments from scholarship or fellowship awards require various approvals based upon the specific award's guidelines. The award package is maintained by the Office of Student Financial Planning and Services or other designated campus administrative office.
- Copies of award documents requiring invoicing should be forwarded to the Accounting Services Department for action with the request for project number assignment. This will help the proper accounting office maintain complete account files and insure timely invoices to donor/sponsors.
There is no specific form used to request new scholarship or fellowship projects. The request should include at a minimum the following information:
- An award letter from the donor/sponsor.
- Source of funding (i.e. GTF account number, external sponsor, etc. to be invoiced) for costs incurred.
- Effective and expiration dates in the donor/sponsor award.
- Campus contact for questions regarding the award.
- If funded by a GTF or GTRC project, a signature of authorization/approval line should be included in the request for a project assignment prior to transmittal to the Accounting Services Department. If not funded by GTF or GTRC, billing instructions or collection instructions should be provided with account request.
- Requests received without approval will be forwarded to the Georgia Tech Foundation, the Georgia Tech Research Corporation or other appropriate campus unit.
There is no specific used to request payments from scholarship or fellowship project. The request should include at a minimum the following information:
- The awardee's name and GT ID number
- Source of funding (997xxxxxx or and 998xxxxxx)
- Description of the expenditure (account code and purpose such as payment of tuition and fees, stipends, etc.) to be charged to the scholarship or fellowship account.
- Amount and distribution date(s) for payment(s) to awardee.
- If funded by a GTF or GTRC account, scholarship and fellowship expenditures will be automatically invoiced to those entities on a monthly cost-reimbursable basis. Adjustments made to invoices will be reviewed and reconciled by the Accounting Services Department. Notification will be forwarded to the Office of Student Financial Planning and Services or other unit authorizing expenditures to request a cost transfer for expenditures in excess of funding or expenditures not authorized by the sponsor's award document.
Processing Scholarship, Fellowship and Other Student PaymentsProcessing Scholarship, Fellowship and Other Student Payments
To provide guidance to Georgia Tech colleges, schools, departments and units as it relates to processing scholarship, fellowship other student payments.
The Internal Revenue Service (IRS) Publication 520 covers the rules for the taxation of student payments. The publication states that the part of any grant, scholarship, or fellowship that represents payments for teaching, research or any other service is taxable to the student. Colleges and universities are obligated to withhold taxes on any award that represents compensation for services. Nonresident alien students may have taxes withheld on awards that do not represent compensation for services. Their tax obligations are governed by their visa status, United States (US) tax laws, and/or the tax treaty between the US and their country of residence.
The Institute is responsible for withholding payroll taxes on the portion of a fellowship or traineeship award made to a student (U. S. Citizen, Resident Alien, or Nonresident Alien who is not claiming an exemption under the provisions of a tax treaty), which represents payment for services required to be performed in order to receive the award. Failure to withhold the taxes when required may create unexpected tax liabilities for Georgia Tech students and cause the Institute to incur serious financial penalties. The Institute will provide the student with a Form W-2 at year-end, which will report to him/her income earned and taxes withheld. The student is responsible for determining his/her tax liability and filing his/her individual income tax return with the IRS. The department is responsible for determining if a student's scholarship, fellowship or other award is requires services to be rendered before receipt of payment. The student, however, is responsible for providing sufficient information to the department to enable a determination of status. Ultimately, it is the student’s responsibility to determine his/her tax liability and file a tax return with the Internal Revenue Service each year.
For more information related to the responsibility of the student in determining his/her own tax liability, please visit the Office of Scholarships and Financial Aid (OSFA) Tax Information website.
This policy is not applicable to payments made to graduate student assistants (GSA's), graduate research assistants (GRA's), and graduate teaching assistants (GTA's).
This policy applies to all schools, colleges, departments, and units of the Institute.
Scholarship – Trainee - Fellowship Payment Grid
The Scholarship – Trainee – Fellowship payment grid provides detailed information on processing student payments. That information includes the following:
- Type of Program/Student
- Program Description (Training Grant, Award, Schl, Fell)
- Account Code
- Project ID (997 project, 998 project or other project)
- Routing Information (Financial Aid, Bursar, AP, Payroll, etc)
- Forms Required (Check Request Form, Vendor Profile Form, Bursar’s Special Payment Form, etc)
- IRS Reporting Requirement for US Students and Non-US Students
Institute Policy for Scholarship/Fellowship Payments and the Payment of Prizes/Awards to Students
For additional administrative information about student payments and the definitions of the different types of student payments, please see Institute Policy for Scholarship/Fellowship Payments and the Payment of Prizes/Awards to Students.
Bursar’s Office Website
Additional information related to student payments may also be found on the Bursar’s Office website at http://www.bursar.gatech.edu/content/forms.
- The student is responsible for providing sufficient information to the department to enable a determination of status. The student is also ultimately responsible for determining his/her tax liability and filing his/her individual income tax return with the IRS.
- The department is responsible for determining if a student's scholarship, fellowship or other award is requires services to be rendered before receipt of payment.
- The Bursar’s Office, Accounts Payable and the Payroll Office are responsible for ensuring timely payments to students.
To report suspected instances of noncompliance with this policy, please visit Georgia Tech’s EthicsPoint, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=7508
|10-03-2014||Controller’s Office||Periodic review and verbiage update. Policy Number change. Assignment change to Bursar’s Office.|
Tax Implications for Student Receiving Scholarships, Fellowships or TraineeshipsTax Implications for Student Receiving Scholarships, Fellowships or Traineeships
This policy was created to provide general information regarding potential federal income tax liability to students receiving scholarships, fellowships or traineeships.
The taxability of scholarships/fellowships/traineeships is determined under provisions of the Internal Revenue Code. Any tax liability under this law is the responsibility of the student. Each scholarship, fellowship or traineeship recipient is responsible for determining how the tax law applies to his/her particular circumstances. The procedures provide general information about how federal income tax law applies to scholarships, fellowships and traineeships.
This policy applies to all colleges, schools, departments, and units of the Institute.
Scholarships, Fellowships, and Traineeships
Scholarships, Fellowships, and Traineeships for US Citizen or Resident Alien with No Services Required
A student (US Citizen or Resident Alien) who receives a scholarship, fellowship or traineeship award for which he/she is not required to perform services (past, present, or future) may exempt from income taxation the portion of the award that is used for qualified tuition and related expenses (tuition, fees, books, supplies, and other equipment required for courses). Any portion of the award used for other expenses, such as room and board or travel, is considered part of the student's gross income and must be reported on his/her individual tax return. Because the student has no employment relationship with the Georgia Institute of Technology (the Institute), the Institute is not required to withhold taxes on the taxable portion of the award and has no tax reporting obligation to the Internal Revenue Service (IRS) or the student.
Please note that the Institute’s Bursar’s Office is required to report scholarships, fellowships and traineeships to the IRS and to the student on Form 1098-T, Tuition Statement. Form 1098-T is primarily intended to help a student or his/her parents claim an education credit, such as the American Opportunity Credit, based upon qualified tuition and related expenses that are not paid by scholarship, fellowship or traineeship. See the Bursar’s website listed in Section 7 below for more detailed information about education tax credits.
Scholarships, Fellowships, and Traineeships for a US Citizen or Resident Alien with Stipulations on Expenses
A student who receives a scholarship, fellowship or traineeship award in which the terms of the award state that a certain amount cannot be used for tuition, fees, books, supplies or required equipment for his/her courses (i.e. a certain amount must be used for room, board or anything other than tuition, books supplies or equipment) is responsible for reporting that amount as gross income on his/her individual tax return. Again, because the student has no employment relationship with the Institute, the Institute is not required to withhold taxes on the taxable portion of the award and has no tax reporting obligation to the IRS or the student.
Scholarships, Fellowships, and Traineeships for Non-Resident Aliens
The tax rules applicable to scholarship, fellowship and traineeship awards made to nonresident alien students differ from those applicable to students who are US citizens or resident aliens. The portion of the award that is used for qualified tuition and related expenses is exempt from US tax and is not reportable to the IRS. The remaining portion of the award is subject to tax and is considered part of the student's gross income and must be reported on form 1042-S and on his/her individual tax return. The Institute will withhold tax at the rate of 14% on this taxable portion unless the award is exempt under a tax treaty between the US and the student's home country. The student must supply the Institute with IRS Form 8233 in order to claim the benefit of a tax treaty.
The student is responsible for determining if he/she is required to file an individual income tax return with the Internal Revenue Service . The portion of a scholarship/fellowship/traineeship award that is used to pay qualified tuition and related expenses is not subject to tax. For more information related to the responsibility of the student in determining his/her tax liability, please visit the Office of Scholarships and Financial Aid website listed in Section 7 below.
The Institute is responsible for issuing a Form 1098-T, Tuition Statement, to a U.S. citizen or resident alien student and to the IRS to report any scholarship, fellowship or traineeship received during the calendar year and to report qualified tuition and related expenses paid during the calendar year not to exceed what was charged for qualified tuition and related expenses during the calendar year. The Institute is not required to issue a Form 1098-T to a nonresident alien student unless the student requests it.
The Institute is responsible for issuing a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, to a nonresident alien student to report any scholarship, fellowship and traineeship even if no withholding is required because of a tax treaty between the U.S. and the student’s home country. Scholarship, fellowship, and traineeship amounts that do not exceed the student’s qualified tuition and related expenses are not required to be reported.
The Institute is responsible for issuing a Form W-2, Wage and Tax Statement, to any U.S. citizen, resident alien, or nonresident alien student to the extent the student receives a scholarship, fellowship or traineeship in exchange for the performance of services. The Institute is also responsible for issuing a W-2 to any student who receives compensation (other than a scholarship, fellowship or traineeship) in exchange for services.
To report suspected instances of ethical violations, please visit Georgia Tech’s Ethics Hotline, a secure and confidential reporting system, at: https://secure.ethicspoint.com/domain/en/report_custom.asp?clientid=7508
|1-10-2023||Controller's Office and Bursar and Treasury Services Office||Policy owner and contact changed to Bursar and Treasury Services Office.|
|1-07-2021||Controller's Office||Updates to verbiage.|
|10-03-2014||Controller’s Office||Updates to verbiage. Removed obsolete portions. Updated title.|