Student Tax

Students receiving university payments (like wages or scholarships) may have tax responsibilities.
This page helps you understand reporting, FICA exemptions, and available tax benefits.

🧾 Student Tax Reporting Information

The IRS requires universities to file Form 1098-T, Tuition Statement, for each student who is enrolled and has made qualified payments toward tuition and related expenses. This form reports amounts billed or paid for qualified tuition, as well as scholarships or grants received. Form 1098-T is used to help determine eligibility for education tax credits when filing a federal individual tax return.

Interest paid on qualified student loans may also be reported on Form 1098-E. This form reports student loan interest paid of $600 or more in a calendar year and may qualify for a tax deduction.

See Bursar’s Office: Form 1098-T, Form 1098-E for access and form details.

🎓 Scholarships and Fellowships

Scholarships and fellowship grants may be partially or fully taxable if they exceed qualified education expenses. As detailed in IRS Publication 970, Chapter 1, only amounts used for tuition, fees and required course materials are tax-free. Amounts used for expenses such as room, board or travel are generally taxable. To find out any tax reporting for scholarships and fellowships, see the IRS Interactive Tax Assistant.
🧾 FICA Tax Exemption for Student Employees

Students employed by the University may be exempt from FICA taxes (Social Security and Medicare) if they meet the following criteria:
- 🎓 Enrolled and registered at least half-time in a degree-seeking program:
  - Undergraduate students: 6 or more credit hours in the current semester
  - Graduate students: 3 or more credit hours in the current semester
- 💼 Student employment is incidental to course of study (e.g., student job, research assistant):
  - Employed as a part-time employee working less than 30 hours per week
  - Position is not eligible for benefits (Total FTE cannot exceed 0.74)
✅ If eligible, the exemption is applied automatically through university payroll processing.

Note: The exemption does not apply during academic breaks of more than five (5) weeks or for full-time staff positions, even if the individual is also taking classes. Students working during the summer semester must meet the same enrollment requirements to remain eligible.

🌍 Special Rules for Nonresident Aliens

International students on F-1, J-1, M-1, or Q visas may also qualify for exemption from FICA taxes.

👉 Visit our Foreign Nationals page for more details

Education Tax Benefits

Education tax benefits can reduce the amount of tax you owe or, in some cases, increase your refund. Eligibility depends on factors such as income, enrollment status, and qualified expenses paid during the tax year.

🎓 American Opportunity Tax Credit (AOTC)

📘 Lifetime Learning Credit (LLC)

💵 Student Loan Interest Deduction

Benefit	Amount	Who Qualifies	What It Covers	Refundable?
American Opportunity Credit	Up to $2,500 per student	Undergraduate students (first 4 years)	Tuition, required fees, and course materials	40% refundable (up to $1,000)
Lifetime Learning Credit	Up to $2,000 per return	Students in any year of postsecondary education	Tuition and required fees (no books)	Nonrefundable
Student Loan Interest Deduction	Up to $2,500 per return	Taxpayers who paid student loan interest	Interest paid on qualified student loans	Deduction (nonrefundable)

Student Tax

🧾 Student Tax Reporting Information

🎓 Scholarships and Fellowships

🧾 FICA Tax Exemption for Student Employees

🌍 Special Rules for Nonresident Aliens

Education Tax Benefits