Financial Aid

The Internal Revenue Service (IRS) provides information on scholarships that may be taxed in their Publication 970. Controller's Office issues the 1098-T each year and you may contact them if you have questions about the information on that form.

The Controller's Office issues a W-2 form for all taxable, work study wages earned at the College, and you may contact them if you have any questions about the information on that form. For information on whether you must file a Pennsylvania Income Tax Return or your home state's return, please contact the Commonwealth of Pennsylvania-Department of Revenue and your state's tax department. IRS tax forms and instructions are usually available at local post offices after Jan. 1. Pennsylvania State income tax forms are usually available at local public libraries. You may also download forms and publications directly from the IRS Web Site.

The American Opportunity Credit and Lifetime Learning Tax Credits

Please see IRS Form 1098-T and other information at the Controller's Office.

Excluding Work-Study on the FAFSA

Federal Department of Education regulations require students to exclude job earnings from the Federal Work-Study Program or any other need-based work programs by entering them on the FAFSA. Please see the instructions on the FAFSA. Any Work-Study listed on your Financial Aid Decision (i.e. either Federal or Haverford) can be considered "need-based" for this purpose. Actual amounts earned are on the payroll check stub provided to you by the Haverford College Controller's Office. Please refer questions about the amount of income taxes withheld from your Work-Study wages to the Controller's Office.

Conversions from a Traditional IRA to a Roth IRA Taxation of Student Aid

We will not count the increase in adjusted gross income attributable to converting a traditional IRA to a Roth IRA when determining the Parental Contribution for Haverford College aid. In addition, we will not take into account the increased Federal Income Taxes due because of the traditional IRA to Roth IRA conversion. Since neither the Profile nor the FAFSA will provide information to allow us to determine that "other income" is from such a conversion, we would ask you to specify the amount of traditional IRA converted to Roth IRA in the "Explanations" section of the Profile Application or address a separate letter to the Haverford College Financial Aid Office with the same information. Also, be sure to include IRS Form 8606 with the tax return you send to us. Note that while these conversions are not counted, withdrawals from IRA's or other retirement funds are counted as income on both the FAFSA and Profile.

For descriptions of the Lifetime Learning Tax Credit and American Opportunity Credit, see the Tax Form 1098-T information at the Controller's Office.

All students who receive grants and scholarships for educational purposes must be aware that some portion of these funds may be subject to U.S. taxation. The portion that is not taxed and the portion that is taxed can be referred to, respectively, as “qualified scholarship” (meaning it does not need to be taxed) and “unqualified scholarship” meaning this portion of the scholarship can be taxed.

Any portion that is to be taxed would be done so at 14%.

Some counties share a tax treaty with the United States which may reduce the tax obligation.

The following information has been provided by the Haverford College Controller's Office to help international students understand how taxation works, and what steps they need to take to make sure all is in order.

Scholarships/Fellowships

U.S. source scholarships/fellowships are reportable only for amounts which are taxable. The taxable portion of a scholarship/fellowship is that portion which is not excludable from gross income as a "qualified scholarship" under IRC section 117. Withhold at 14% if the payee is in F, J, M, or Q nonimmigrant status. Withhold at 30% for payees in other nonimmigrant statuses. The student articles of some income tax treaties exempt scholarships/fellowships from U.S. income tax. (See Table 2 in IRS Publication 515 or 901.) The beneficial owner may claim the lesser tax treaty rate by filing Form W-8BEN with the withholding agent. The withholding agent will report the payment on Forms 1042 and 1042-S, even if the entire amount is exempt under a tax treaty. (Source: https://www.irs.gov/individuals/international-taxpayers/federal-income-tax-withholding-and-reporting-on-other-kinds-of-us-source-income-paid-to-nonresident-aliens)

What is “Qualified Scholarship”?

The qualified amount received from a scholarship/fellowship grant is not considered taxable income to a matriculated student if the money is used for “qualified tuition and related expenses” as outlined below from 26 U.S. Code § 117 - Qualified scholarships:

1. tuition & fees required for the enrollment or attendance of a student at an educational organization.
2. fees, books, supplies, and equipment required for courses of instruction at an educational organization.

The amount received by the student for qualified expenses does not need to be reported to the Internal Revenue Service (IRS) on Form 1042-S.

What is “Non-qualified Scholarship”?

The non-qualified amount received from a scholarship/fellowship grant is a payment to the student above the costs required for tuition, fees, books, supplies, and equipment. This income is often used by the student for room & board or other non-required expenses, and is considered taxable by the IRS.

Non-qualified amounts paid to international students with an F-1, J-1, M-1, or Q-1 visa are taxed at a rate of 14% unless a claim of tax treaty benefits is made in Part II of Form W-8BEN.

Please see the following list of countries that have a tax treaty with the U.S. which includes an exemption for non-compensatory, academic payments to students. To be eligible for a reduction in tax withholding the student must live in a country that provides a tax treaty benefit, have a valid U.S. taxpayer identification number, and submit Form W-8BEN to the Controller's Office.

Form W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)

Form W-8BEN can be completed manually (Form W-8BEN) or using Sprintax Calculus. Please email purchasing [at] haverford.edu for a Sprintax Calculus activation link. Once you receive the link, simply complete the online questionnaire and tax documents will automatically be generated.

Non-qualified payments and the amount of Federal Tax withheld, if any, will be reported on Form 1042-S; copies will be sent to the student and to the IRS by March 15th of the following calendar year.