Taxes & Withholdings
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Description
Stipends paid to postdoctoral researchers and non-NRSA post-doctoral fellows are compensatory in nature and are considered wages for federal income and FICA tax withholding. Stipends paid to NRSA post-doctoral fellows continue to be considered non-compensatory and are therefore not considered wages for federal income or FICA tax withholding purposes. Penn does not withold federal taxes or FICA on NRSA Fellows’ stipends.
All postdoc stipends are taxable for Pennsylvania personal income tax and subject to withholding. The stipends are also taxable for the Pennsylvania State Unemployment tax.
In addition, all postdoc stipends are subject to City of Philadelphia wage taxes and withholding.
Although no reporting or withholding is required for National Research Service Award (NRSA) postdoctoral appointments, NRSA Fellows must report and pay federal income tax on any payments in excess of tuition, fees, books, and certain other expenses. For additional information regarding an NRSA Fellow’s responsibility for reporting such payments, please consult IRS Publication 970: Tax Benefits for Education. Further, there are special rules for nonresident aliens. For more information on tax treatment for nonresident aliens, please consult the IRS Publication 519: U.S. Tax Guide for Aliens.
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For general information regarding your postdoctoral classification and tax requirements, please contact your department or school’s business administrator or the Penn Employee Solution Center.
For local IRS Office information, click here.
Please consult a tax professional if you have any questions regarding your personal tax situation.
Related FAQs
What is an NRSA Fellow?
An NRSA Fellow is a postdoctoral position. NRSA Postdoctoral Fellows are individuals who come to the University for the principal purpose of furthering their personal development through participation in advanced training programs. They hold post-baccalaureate degrees, normally the highest degree earned in the field. The source of funding is an individual or institutional National Research Service Award from the federal government to support the individual’s training (T32 or F32).
The IRS defines an NRSA Fellow as a trainee that does not provide a service to the college. Due to these IRS regulations, no federal tax or FICA can be withheld from an NRSA Fellow stipend and an NRSA Fellow cannot receive any benefits that result in a tax impact (e.g. pre-tax contributions to a retirement account). An NRSA Postdoctoral Fellow’s stipend is subject to State, Local and State Unemployment Compensation taxes. No employment benefit rate can be charged to NRSA funding.
How should I address stipend and salary issues?
The minimum compensation level for postdocs at Penn is published on annual basis by the OVPR, in consultation with the Provost’s Council on Research, representing all of the schools of the University. When a funding sponsor mandates stipend levels higher than the University minimum, mentors are obligated to pay the higher amount. Postdocs with prior postdoctoral experience at another institution should receive compensation that reflects their expertise and prior years of experience.