1.0 Policy Purpose
The purpose of this policy is to state the requirements for providing fellowships to Brown University students and scholars, as well as researchers and scholars unaffiliated with Brown.
2.0 To Whom the Policy Applies
This policy applies to all Brown University faculty, staff and students, as well as researchers and scholars unaffiliated with Brown who are eligible for fellowship payments.
3.0 Policy Statement
According to the Internal Revenue Service (IRS), a fellowship is an amount paid to or allowed for the benefit of an individual to aid in the pursuit of that individual’s own study or research.
Fellowships can fund independent travel, research and teaching for both undergraduate and graduate students at the University or could also be supplemental payments to internal or external researchers for research expenses. Fellowships are provided on a merit or need basis, without any required service component.
Examples include, but are not limited to, the following:
- UTRAs - Dean of the College
- LINKs - Dean of the College
- Signature Awards - Dean of the College
Fellowships are not scholarships. Scholarships are financial aid issued through the Financial Aid Office.
Fellowships are not reimbursements. Receipts are not required or expected.
Fellowships are paid either through a supplier invoice or Activity Pay in Workday. The payment must include the fellowship award letter or email, if available, and either the Brown Student Fellowship Form or, if the recipient is a visiting scholar, the Payments to Visiting Researchers/Scholars Form. The appropriate spend category must be used based on the type of fellowship (i.e., recipient, purpose, etc.).
3.1 U.S. Resident Student / Scholars
All or part of the fellowship to a U.S. resident student/scholar is tax-free if either of the following conditions is met:
- The recipient is a candidate for a degree at an educational institution such as Brown University (i.e., undergraduate or graduate students, but not post docs), and the amounts received are used to pay for tuition and fees required for enrollment or attendance at the educational institution or for fees, books, supplies, and equipment required for courses at the educational institution.
- The fellowship payments are required by the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program, or another comprehensive student work-learning-service program.
Fellowships must be included in the recipient’s gross income and are taxable if either of the following conditions are met:
- The fellowship is used for incidental expenses, such as room and board, travel, clerical help, equipment, incidental living expenses or other expenses not required for enrollment in or attendance at the University.
- Amounts are received as payments for teaching, research, or other services required as a condition for receiving the or fellowship.
Fellowships to U.S. residents are not reported to the IRS by the University. The recipient is responsible for keeping track of these payments and determining if they are personally taxable to the individual.
3.2 Foreign National Students/Scholars Inside the U.S.
Fellowships to foreign nationals located in the U.S. are reportable on a Form 1042s. The fellowship is taxable unless there is a tax treaty between the U.S. and the recipient’s country of residence that specifically exempts the fellowship from taxation.
Foreign national students/scholars will receive a Form 1042s reporting the fellowship payments and any taxes withheld.
3.3 Foreign National Students/Scholars Outside the U.S.
Fellowship payments to foreign nationals located outside of the U.S. are considered foreign sourced income based on their nonresident status at the time of payment, and thus will not be reported on Form 1042s or taxed according to U.S. tax law. The recipient is responsible for determining if these payments may be personally taxable in their home country.
All individuals to whom this policy applies are responsible for becoming familiar with and following this policy. University supervisors and employees with student oversight duties are responsible for promoting the understanding of this policy and for taking appropriate steps to help ensure and enforce compliance with it.
Financial Coordinators: Responsible for compiling relevant supporting documentation and initiating the applicable transactions.
Cost Center Managers: Responsible for approving fellowship payments in Workday
Accounts Payable: Responsible for reviewing fellowship transactions.
6.0 Consequences for Violating this Policy
Failure to comply with this and related policies is subject to disciplinary action, up to and including suspension without pay, or termination of employment or association with the University, in accordance with applicable (e.g., staff, faculty, student) disciplinary procedures.
7.0 Related Information
Brown University is a community in which employees are encouraged to share workplace concerns with University leadership. Additionally, Brown’s Anonymous Reporting Hotline allows anonymous and confidential reporting on matters of concern online or by phone, 877-318-9184.
The following information complements and supplements this document. The information is intended to help explain this policy and is not an all-inclusive list of policies, procedures, laws and requirements.
7.1 Related Policies
7.2 Related Procedures
7.4 Frequently Asked Questions (FAQs)