Fellowships vs. Assistantships

Fellowships can be administered as a Fellowship (True Fellow) or as a Fellowship Administered as an Assistantship (Fellowship Assistantship).  In most cases, the sponsor of the funds specifies how the fellowship will be administered. 

Purdue University must make a distinction between true fellows and fellowship assistantships for the purpose of reporting to the Internal Revenue Service (IRS).  The University recognizes that there exist substantial similarities between true fellows and fellowship assistantships, and wide diversity in relationships between mentors and graduate students regardless of the student's source of financial support. All graduate students receive guidance and direction in the design and conduct of their thesis/dissertation research from their major professor, and faculty advisors approve all thesis/dissertation research projects.

True fellows are not employees of Purdue.  True fellows receive scholarship or fellowship payments (stipends) intended to assist them in pursuing a course of study or research. This payment is not a payment for teaching, conducting research, or other services. Purdue does not report the payment to the IRS. True fellows have the following characteristics:

  • must be candidates for a degree.
  • must have major professors who can appropriately mentor the proposed research and provide an environment conducive to carrying out this research.
  • generally are free to explore new areas, depending on the progress of the research.
  • are not considered graduate staff of the University. Payment is provided in the form of a stipend provided to support the fellow. Stipends are not considered compensation for services.

Fellowships generally are awarded to students who may freely select the faculty adviser with whom they will conduct research while receiving their stipend.

Fellowship assistantships are employees of Purdue.  Fellow assistantships receive payments (salary), which is taxable income reported by Purdue to the IRS. The salary earned by fellow assistants is subject to withholding for income tax, Social Security tax, and Medicare, and is reported on the W-2 at year end.

Fellow assistants have the following characteristics:

  • assistantships must be candidates for a degree.
  • the work for which fellow assistantships are being compensated may or may not be related to their degree requirements. For example, a number of departments employ assistantships pursuing degrees in other fields of specialization to assist in teaching their classes.
  • if the work in which the student is performing supports the development of their theses, the major professor plays a large role in devising the research plan. Normally, the research is part of the larger program of the major professor. While the student is encouraged to explore new and innovative methods/ideas, the student cannot deviate from the research without the concurrence of the major professor.
  • fellow assistantships are considered staff of the University and receive a salary that is considered payment for services.

Tax Implications

There are different tax and financial aid implications for graduate fellows and graduate assistants. There are also different implications for domestic and international students. Details of these implications are addressed below.

The interpretation and implementation of the tax laws is the domain of the Internal Revenue Service (IRS). The Graduate School takes no position on the status of a particular taxpayer, nor does it have the authority to dispense tax advice. Students should consult a tax expert for advice. That stated, modest guidance on stipend taxability is provided here.

Graduate Fellows (True Fellow) - Part of the payment (stipends that are used for meals, lodging, non-mandatory medical insurance, travel, personal living expenses or other non-course-related expenses) made to a graduate fellow is taxable income. Other parts of the payment (portions used for tuition and fees required for enrollment or attendance at the University and/or other mandatory fees, such as books, supplies, and equipment required to be used by all students in a particular course of study) are not taxable.

U.S. Citizens
  • According to the IRS, a portion of fellowship payments may be subject to income tax.
  • Students who are pursuing a degree may exclude from taxable income the part of the fellowship applied to tuition and fees required for enrollment or attendance or for the purchase of books, supplies, and equipment required for courses.
  • The portion of the fellowship used for room and board or personal items must be reported as taxable income.
  • The IRS does not allow the University to withhold income tax on fellowships. Therefore, a Form W-2 Wage and Tax Statement will not be issued at year end. Consequently, taxes may be owed when a tax return is filed.
  • Additional information about the taxability of fellowships is provided in Internal Revenue Service Publication 970, Tax Benefits for Education.
International Students
  • According to the IRS, the University must withhold 14 percent federal income tax from fellowship payments, unless the student is exempt from tax because of a treaty between his or her country of residence and the United States. The Purdue University Payroll Department will notify international students of the procedures to obtain this exemption.
  • A nonresident alien is required to complete Form 1040NR and return it to the IRS, even if his or her fellowship is exempt from tax.
  • More information about the taxability of fellowship payments to nonresident aliens is provided in IRS Publication #519, U.S. Tax Guide for Aliens.

Graduate Assistants (Fellowships Administered as Assistantships) - Students with fellowships administered as assistantships are considered employees of the university.  Therefore, the salary earned from this position is subject to withholding for income tax, social security, and Medicare tax and is reported on the W-2 at year end.

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