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I am a postdoc in the US, paid on a fellowship from my university for which there are no withholdings.

Do I need to pay quarterly taxes, both federally and to my state?

I expect that I will owe a significant amount at the end of the year if not doing so, but doing my taxes 4x per year would be tough!

As a follow up, if I do need to pay quarterly taxes, what do I do about the money I already received this year since the deadline for the first quarter has passed?

EDIT: This fellowship comes in the form of a salary paid out to me monthly, if that matters, but again, no withholdings.

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  • Are you a US resident/citizen? Or are you on a specific visa, and if so - from what country are you coming?
    – littleadv
    May 30 at 19:52
  • Also, consider this: money.stackexchange.com/questions/28077/…. Does it answer your question?
    – littleadv
    May 30 at 19:53
  • @littleadv Thank you. I am a US citizen. As far as I can tell, the link doesn't specifically address my question, which has to do with whether or not I need to pay quarterly due to the lack of withholding.
    – user122431
    May 30 at 20:00
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    If you expect to have taxes owed at the end of the year then yes, you do. It has nothing to do with your specific source of income, it's generally true for any situation. There are some "safe-harbor" rules (including the ones mentioned in the answer), these are also true for everyone regardless of source of income.
    – littleadv
    May 30 at 20:20
  • You really need to ask your university's payroll department what is going on. Not withholding taxes is not normal for a postdoc position. Furthermore, if they are not withholding income tax, then they are probably not withholding FICA either, which means you are going to be eating a very large tax bill at the end of the year. Forget mucking around with estimated tax; get this withholding situation fixed right away.
    – Nobody
    May 31 at 16:37

1 Answer 1

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I'm using IRS Topic 421 and IRS Pub 505 as references. Note that state tax withholding and estimated payment rules may differ from federal.

If you had 1) no tax liability for 2022, 2) were a U.S. citizen or resident alien for the whole year, and 3) your 2022 tax year covered a 12-month period, you don't have to pay estimated taxes for 2023. However, you'll still owe taxes for 2023 in April 2024.

Fellowship income as payment for services is fully taxable, with some exceptions for services required for certain programs (see tax topic 421 linked above). There may be exceptions for certain non-resident alien visa holders due to specific tax treaties as well.

If you expect to owe at least $1,000 for 2023 AND you expect your withholdings to be less than the smaller of 90% of your 2023 tax liability or 100% (110% if AGI >$150k) of your 2022 tax liability, you are subject to estimated taxes.

The "standard" way of paying estimated taxes is to make four equal payments on or before April, June, September, and January 15th such that your total payments equal or exceed the lesser of 90% of 2023's tax liability or 100% (110% if AGI >$150k) of 2022's tax liability. You can pay by check with a 1040-ES payment voucher attached, online through your IRS portal, or over the phone.

You're also allowed to make a late estimated payment. You'll be subject to penalties and interest up to the point the required payment is satisfied.

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  • Thank you for the exceptionally thorough answer. I hope I understand. I meet the criteria in paragraph 2, but I can't tell if I still need to estimate my taxes for this year based on what you say in paragraph 4. Since I didn't owe anything for tax year 2022 when I wasn't on the fellowship (I think that's what you mean by liability?) does that mean I am not subject to estimated taxes after all?
    – user122431
    May 30 at 20:12
  • I'm still confused because I meet criteria 1-3 in paragraph 2, which suggests that I don't need to pay quarterly taxes for this year. But I also expect to owe at least $1000 for 2023 and expect no withholdings for most of 2023, which from the paragraph four seems to suggest I need to pay quarterly taxes after all.
    – user122431
    May 30 at 20:23
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    @user2561523 follow this: irs.gov/help/ita/am-i-required-to-make-estimated-tax-payments
    – littleadv
    May 30 at 20:29
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    @user2561523 since your 2022 tax liability was $0, your required estimated payment of 100% of your 2022 tax liability would be $0. Remember that it's the lesser of 90% of your 2023 tax liability or 100% of your 2022 tax liability.
    – Stan H
    May 30 at 21:50
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    @user2561523 I should also note that if you file Married Filing Jointly, your joint income and taxes are what matter, not your individual income/taxes.
    – Stan H
    May 30 at 21:53

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