Portable Housing Subsidy for former University Village and Cripe Street Residents
Tax Implications
Because the portable subsidy for housing is a "scholarship/ fellowship"-type payment, the IRS does not require the University to either withhold income tax (except as indicated below related to international students) from the payment or report the payment to you on a tax form at the end of this calendar year.
Payments of this type, such as for room and board, travel costs, or other living expenses, are considered by the IRS to be ‘non-qualified’ scholarships (i.e., since not used for tuition/books, etc.) and are considered taxable income. In addition, if the University directly or indirectly pays any other expenses related to this award on your behalf, these would be considered taxable income as well.
You would be expected to self-report the amounts paid by the University as taxable income on your personal income tax return at the end of the year (even though Notre Dame is not sending you a W-2 or Form 1099). Since this award will be taxable, you should consider consulting with your tax preparer to review the tax consequences of the award, and also if it is necessary to make federal and/or state estimated tax payments (which would be due on April 15, June 15, September 15, and January 15 annually).
Finally, if you are a foreign national who is considered a nonresident alien for tax purposes, the University will typically be required to withhold federal and state income tax from our payment to you and to report this payment at year-end on Form 1042-S.