The Institute is obliged to withhold federal and Massachusetts income taxes from the stipends of teaching and research assistants. For tax purposes, research assistant and teaching assistant stipends are considered as “earned income” as a result of the services rendered. Therefore, assistants must file the necessary federal and Massachusetts tax withholding forms with the Payroll Office or the student’s departmental graduate office.
Fellowship stipends are also legally taxable income. However, the tax withholding regulations do not allow for withholding federal and Massachusetts income taxes from the fellowship payments. Thus, students should anticipate the tax obligation.
The tuition scholarship portion of research assistant, teaching assistant, and fellowship awards is not considered income to the student. Therefore, this amount is not included on any tax document issued by MIT at year end, and should not be reported by any student on his/her federal or Massachusetts income tax returns.
The US government requires all graduate students hired for research and teaching to sign, under penalty of perjury, an Employment Eligibility Verification (I-9 Form). You must produce specified documents, which verify your identity and authorization to work, and present them with your signed I-9 form to Student Financial Services.
To help in the preparation of federal taxes, students may wish to consult IRS Publication 970, Tax Benefits for Education. This useful publication addresses a variety of issues related to graduate students and their tax obligations. Chapter 2 of Publication 505, which describes who must pay estimated tax, may also be helpful. Pricewaterhouse Coopers (PWC) also prepared a presentation on general guidelines for reporting RA, TA, and fellowship stipends for domestic graduate students.
International students at MIT can benefit from CINTAX, an on-line tax preparation system for international students holding F-1 or J-1 visas. CINTAX is only of assistance in the preparation of federal (US) taxes. Please contact the International Students Office for more information.