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Student Travel Reimbursements

Travel reimbursements are considered taxable Travel Grants by the IRS and are taxable to the international student (at 14%) if there is no identifiable business purpose or benefit to Vanderbilt.  If the travel is for the student’s personal, educational benefit, it is considered taxable scholarship income.  This categorization also includes student recruitment travel reimbursements.  If the student recruit is not in the U.S. in an F or J status, the travel is considered OTHER taxable income by the IRS, and is taxable at 30%.  The department requesting reimbursement may request that the payment be grossed up to cover the taxes. 

If travel is being booked and paid for ON BEHALF of an international, this travel is still considered a taxable benefit and is taxable.  The department booking travel will need to provide the ITO with a Center Number to charge the tax to.

Topic 421 - Scholarships, Fellowship Grants, and Other Grants - https://www.irs.gov/taxtopics/tc421.html

A scholarship is generally an amount paid or allowed to a student at an educational institution for the purpose of study. A fellowship grant is generally an amount paid or allowed to an individual for the purpose of study or research. Other types of grants include need-based grants (such as Pell Grants) and Fulbright grants.

Taxable

You must include in gross income:

  • Amounts used for incidental expenses, such as room and board, travel, and optional equipment.
  • Amounts received as payments for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant. However, you don't need to include in gross income any amounts you receive for services that are required by the National Health Service Corps Scholarship Program or the Armed Forces Health Professions Scholarship and Financial Assistance Program.

Tax-Free

If you receive a scholarship, a fellowship grant, or other grant, all or part of the amounts you receive may be tax-free. Scholarships, fellowship grants, and other grants are tax-free if you meet the following conditions:

  • You're a candidate for a degree at an educational institution that maintains a regular faculty and curriculum and normally has a regularly enrolled body of students in attendance at the place where it carries on its educational activities; and
  • The amounts you receive are used to pay for tuition and fees required for enrollment or attendance at the educational institution, or for fees, books, supplies, and equipment required for courses at the educational institution.