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I. |
The University of Wisconsin is required to report payments made through the Payroll Office by January 31st of each year for income received in the preceding calendar year. A W-2 Form is used to report wages and non-qualified scholarships received by employees. |
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A. |
Employees with benefit payments deducted pretax or with taxable benefits will have a W-2 which reflects these payments and benefits. The Wages, Tips, Other compensation
(Box #1 of the W-2 form) is already adjusted for these payments. See an explanation
of the W-2. This will be sent to each employee in January using the current address on file. |
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B. |
Student employees may be exempt from Social Security taxes. See Policy
7.7.1. |
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C. |
Income received as a Research Assistant is reported on the W-2. This income is considered a non-qualified scholarship. |
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II. |
A Fellowship/Scholarship
informational letter is sent by January 31st of each year to citizens of the United States who are recipients of Qualified Scholarships or Fellowships. |
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A. |
If the income received consists of forgivable loans, the person will have signed promissory notes totaling the amounts received. This income is taxable in the years the loan is forgiven. |
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B. |
If the income is not a forgivable loan, the person may be eligible to exclude educational expenses in determining the taxable income received. |
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1. |
Since no taxes are withheld on this income, the person must file quarterly estimated payments or increase W-4 withholding from their wages if there is an income tax liability for this income. |
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2. |
See IRS Publication 970
Tax Benefits for Education. |
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III. |
A 1042S Form is sent by January 31st of each year to Nonresident Aliens who are recipients of scholarships, fellowships or who have income exempt from withholding due to a tax treaty. |
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IV |
Tax Filing Information for US Citizens, Permanent Residents (Green Card Holders)
and Resident Aliens can be found at the following link: http://www.bussvc.wisc.edu/ecbs/tax-info.html |
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For information contact the Payroll Office at 5804 or
email. |
