 Taxes, Social Security And Medicare Deductions [Home] [Up] [Handbook Contents] The tax year typically ends December 31. You must file both federal and state income tax returns or request an extension by the following April 15. (When filing an extension, the estimated tax liability must be sent with the request for an extension.) IRTA Postdoctoral Fellowships are considered awards for training and neither Social Security nor Medicare are deducted from stipends. Definitive determinations regarding Social Security obligations and coverage must be made by the Internal Revenue Service. Nevertheless, it is the opinion of the NIH Legal Advisor that Postdoctoral Fellows are not considered self-employed for purposes of Social Security Act coverage, and therefore need not make Social Security or Medicare payments on their own behalf. Postdoctoral Fellows may not establish an IRA and/or SEP-IRA since these retirement options are available only to an individual who received compensation for performing services. In this case, incurring the self-employment tax trying to take advantage of these retirement options would defeat the purpose of trying to reduce total income tax by setting up a SEP (simplified employee pension) or SEP-IRA. However, IRTA Postdoctoral Fellowships are subject to federal, state, and local income taxes. Postdoctoral Fellows may be required to file quarterly estimated federal and state income tax returns since NIH does not withhold taxes from stipends. For Postdoctoral Fellows who are paid more that $600 in a calendar year, the NIH will file Form IRS 1099-G, Statement for Recipients of Certain Government Payments, or form IRS 1042-S, Foreign Person's U.S. Source Income Subject to Withholding (for resident aliens). Interpretation and implementation of the tax laws are the domain of the IRS and the courts. Postdoctoral Fellows should consult their local IRS office about the applicability of the current tax code to their own situations, and for information about tax code changes, taxability of fellowship stipends, and the proper steps to be taken regarding their tax obligations. Tax advice may be obtained from the following offices:
Tax forms are also available from the above offices, public libraries and the Recreation and Welfare Association, 31/B1W30A, (301) 496-6061.
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