I was previously an international PhD student in the USA on F1 visa, and I graduated in August 2022 (was a resident alien in 2022), and moved to Germany late 2022. Then in May 2023 I received an award money of $5000 from my graduate school due to excellence of my PhD work. But I've never been in USA the whole year of 2023, do I still need to file tax forms for year 2023 reporting this award money? My school didn't withhold any tax for this award, do I need to pay tax for it (if so, how to pay for that?)?
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1 Answer
This income is taxable. It is considered FDAP (Fixed/Determinable/Annual/Periodical) income and is taxed at flat 30% (unless a tax treaty provides anything else).
See the IRS page on FDAP:
Tax at a 30% (or lower treaty) rate applies to FDAP income or gains from U.S. sources, but only if they are not effectively connected with your U.S. trade or business. The 30% (or lower treaty) rate applies to the gross amount of U.S. source fixed or determinable, annual, or periodical gains, profits, or income. Deductions and netting are not allowed against FDAP income.
The following items are examples of FDAP income:
...
- Scholarships and fellowship grants
- Other grants, prizes and awards
...
Since the income is in 2023, after you've left already, you'll probably be filing the non-resident 1040NR form.