As I understand the law, student stipends are exempt from Social Security and Medicare taxes. If my university takes these taxes out of my stipend income, can these taxes be recovered in some way?
If you are not performing a service for the university, your stipend would be subject to income tax only if it does not meet the qualified scholarship rules. Please refer to Publication 970 Tax Benefits for Education, for information on when a stipend would be a qualified scholarship, which would not be subject to income tax or social security and Medicare taxes. If you are performing a service for the university, your income is taxable for income tax purposes, but would generally be exempt from social security and Medicare taxes if you are enrolled and regularly attending classes unless you are covered under a section 218 agreement. Refer to Publication 15, Employer’s Tax Guide. If your employer has been incorrectly withholding social security and Medicare taxes from your stipend, the employer should refund the withheld tax. If the employer refuses to do so, Form 843, Claim For Refund and Request For Abatement, can be filed to claim credit for the incorrectly withheld tax.
Related Questions
- As I understand the law, student stipends are exempt from Social Security and Medicare taxes. If my university takes these taxes out of my stipend income, can these taxes be recovered in some way?
- As I understand the law, student stipends are exempt from FICA and Medicare taxes. If my university takes these taxes out of my stipend income, can these taxes be recovered in some way?
- Are student workers exempt from F.I.C.A. (Social Security and Medicare taxes)?
