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Are scholarship or fellowship payments made to a foreign national subject to tax withholding?

Yes. Withholding may be required on scholarship and fellowship payments made to foreign nationals unless the payment is a qualified scholarship or fellowship or is excludable under a tax treaty.

Qualified scholarships or fellowships are defined in IRS publication 519, Chapter 3.

The default tax rate for foreign nationals is 30%. In cases of nonqualified scholarship/fellowship payments to F, J, M, or Q, visa holders may be able to reduce their tax rate to 14%.

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Updated on May 30, 2023

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