Advice for International Students
The Physics Department gives many prizes to physics majors and potential physics majors. For International Students who are awarded a departmental prize, the following rules apply:
For non-resident alien students, the University is required to withhold tax on the full amount of any prize (normally at 14% for enrolled students and 30% for non-enrolled students) and to report the prize amount to the IRS and to the student on a Form 1042s. If tax is withheld, the student may be eligible to receive a refund for some or all of the withheld amount upon filing a non-resident alien income tax return in April next year. The University notifies the student if tax has been withheld from the prize award. A student may also avoid tax withholding if he or she is from a country that has a tax treaty with the US; the prize payment is covered under the treaty; and the student has signed up for the treaty with Payroll.
Hence, withholding can often be avoided by applying for the tax treaty benefits. This must be done at least two weeks before the prize is awarded. However, it is much better to just sign up as soon as you have the opportunity. For more information, consult the payroll department or contact firstname.lastname@example.org