Taxes

Tax Basics

Learn about what determines your tax bill and how your taxable income, credits, and deductions can come into play:  iGrad Course: Filing your taxes.

How do I pay taxes?

Typically, you do not pay taxes once a year at tax time—you pay taxes all year via deductions from your paycheck. The amount deducted depends on the number of withholding allowances you claim. As a general rule: more allowances = less tax deducted, and fewer allowances = more tax deducted.

At tax time, your tax liability is calculated based on your income and any adjustments to that income. If you have not paid your tax liability over the year, you still owe tax; if you have overpaid, you will receive a refund.

Do I need to file a tax return?

If you earned income in excess of the limit set by the IRS, then you will have to file taxes for that year.  The Internal Revenue Service offers an interactive tool which can help determine if you are required to file. 

Even if you aren't required to file a return, you may want to file. If too much tax was taken out of your income, for example, you would be eligible for a tax refund that you otherwise would not receive by not filing.

How do I file a tax return?

Most students who are US citizens or permanent residents should be able to file a tax return for free, using IRS free software resources.   

If you are an international student, contact the Davis International Center.

Taxable Scholarship

In some cases your scholarship may be considered "taxable income" by the federal government—that is, if you file a tax return, you may have to report a portion of your scholarship as income you earned in that year. Typically, scholarship funding that goes toward "qualified costs" such as tuition, fees, books, and supplies is nontaxable; scholarship funding that goes toward "non-qualified expenses" such as room, board, and other non-course-related expenses may be taxable.

Most U.S. citizens and permanent residents will receive a Form 1098-T from the University mailed to your home address. This form states both the amount of tuition billed to you and the amount of scholarship aid you received in the calendar year.

If your scholarship aid is less than tuition, then there is no taxable scholarship. If your scholarship aid is greater than tuition, then the excess amount may be considered taxable income. If you track your textbook purchases during the calendar year, you may be able to subtract these expenses from the excess amount before reporting as income.

If you have specific questions about determining taxable scholarship, contact the University Tax Department at tax@princeton.edu.

Taxable Scholarship for International Undergraduates

The Internal Revenue Service (IRS) requires the University to withhold taxes on “nonqualified scholarship,” which represents any amount of grant aid you receive that exceeds the tuition and required fees for each term. While grants above tuition and required fees are often to pay for housing and food costs, the IRS considers them to be taxable income.

Therefore, if you receive nonqualified scholarship, Princeton will post a charge for the applicable taxes on your student account each semester to cover the payment Princeton remits to the IRS on your behalf. At the conclusion of each tax year, you will be required to file a Non-US Resident income tax return each year for any income received.  Depending on a student’s total income for that year, they may or may not be eligible for a tax refund at that time

In some cases, students may be eligible for a tax treaty exemption. Please contact Global Financial Services via email: globalfin@princeton.edu if you have questions about your possible tax treaty eligibility

Tax documents provided by the University

Depending on whether you worked for the University, received financial aid, or were funded for other programs, the University may provide any of the tax documents below: