Does ORAU withhold federal and state income taxes for Fellows who are U.S. citizens?
Since NPP Fellows are not employees, and since they receive awards (not wages), ORAU does not withhold state or federal income taxes from award payments for U.S. citizens. Participants, therefore, should consider filing Form 1040-ES on a quarterly basis and pay estimated federal income taxes in order to avoid late payment penalties. Travel expense reimbursements (including relocation costs) are not taxable. Fellows should consult a tax accountant or other tax professional regarding state and federal income tax requirements. NPP Fellows receive award payments from ORAU, which are reported to the Internal Revenue Service (IRS) by ORAU as “Miscellaneous Income—prizes and awards” as defined in IRS Code Section 74.
Since NPP Fellows are not employees, and since they receive awards (not wages), ORAU does not withhold state or federal income taxes from award payments for U.S. citizens. Participants, therefore, should consider filing Form 1040-ES on a quarterly basis and pay estimated federal income taxes in order to avoid late payment penalties. Travel expense reimbursements (including relocation costs) are not taxable. Fellows should consult a tax accountant or other tax professional regarding state and federal income tax requirements. NPP Fellows receive award payments from ORAU, which are reported to the Internal Revenue Service (IRS) by ORAU as “Miscellaneous Income—prizes and awards” as defined in IRS Code Section 74. All payments by ORAU should be reported on the Fellow’s federal income tax return, Form 1040, as “Other Income” and be identified as a “Fellowship Award.
