How to Claim Grant Money on Taxes
- 1). Understand the different sides of the tax equation. A grant involves two parties: the giver and the receiver. The giver has to pay taxes only if the receiver is a nonresident alien. The receiver claims the grant within his gross income.
- 2). Determine the rate to pay if you are the giver. In general, the entity giving the grant must pay taxes of 30 percent on grant monies paid to nonresident aliens.
- 3). Determine your tax rate. If you are a student (defined as a degree-seeking individual), you do not have to pay taxes on grant money. But if you're not a candidate for a degree, the grant amount can be subject to withholding and included in your gross income. It will be taxed at your income tax rate. This holds true for post-doctoral research scholars as well.
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