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IRTA TAX INFORMATION FOR THE 

2003 and 2004 TAX YEARS

All IRTAs should have received their Form 1099G from NIH, stating what was paid to them in 2003. If you have not received your 1099G by February 16, 2004 or if your mailing address has changed in the past year and you did not submit a Change of Address Form please call NIH/OFM, 6-5635 to have your 1099G sent to you.

The IRTA stipend is considered a taxable grant award by the Internal Revenue Service (IRS) and MUST be reported. NIH sends copies of Form 1099G to the IRS, and the IRS does check.

IRTAs should file tax Form 1040 -- not Form 1040A or Form 1040EZ. Public libraries and post offices should have 1040 forms. Forms can also be downloaded from these sites:

Federal tax forms:

    IRS- Internal Revenue Service

State tax forms (listed are the states where NIH fellows generally live):

Other sources:

    H&R BLOCK

    TurboTax- free for IRTAs who qualify based on income

    Federation of Tax Administrators - The Federation of Tax Administrators (FTA) was organized in 1937. Its mission is to improve the quality of state tax administration by providing services to state tax authorities and administrators.  Follow this link to get to their index of links to the websites for every state in the U.S.

    NIH FCU - The NIH Federal Credit Union has some useful links and information

(1a) General Directions for filing Form 1040:

On line 21 of Form 1040 enter the amount stated on Form 1099G; this is your award amount.

Complete the rest of Form 1040 as appropriate to your personal financial situation: your exemptions, standard deductions, etc. In the section called 'Payments' (line 63 of Form 1040) you should enter the amount you have already paid in quarterly taxes, if any (see below). Sign the form and enclose the amount due, if any. Payment of taxes due is usually by check, though credit cards are now also accepted by the IRS and many state governments. Do not send cash. Do not attach Form 1099G; the IRS already has this information.

Do not file for self-employment (Schedule C). You will end up paying more taxes. If you have filed a Schedule C you can get your money back by filing an amended tax return, a 1040X. You have up to three years to file from the date you originally filed incorrectly.

Mail your 1040 by April 15, 2004.

Your first quarterly estimated tax payment for 2004 is *also* due on April 15. This should be mailed separately, preferably accompanied by a payment voucher. Write '2004 Form 1040-ES' on the check if it is for a Federal quarterly tax payment; for state taxes, see instructions on their quarterly tax forms.

(1b) Filing quarterly taxes (Form 1040ES):

Most IRTAs owe taxes but do not have them taken from their stipend checks. Therefore they must pay quarterly taxes to the Federal and local governments. April 15, 2003, June 16, 2003, September 15, 2003 and January 15, 2004 are the dates that Federal, Virginia, and Maryland estimated taxes were due for tax year 2003. For the 2004 tax year, the dates are April 15, 2004, June 15, 2004, September 15, 2004 and January 17, 2005. The Federal quarterly tax form is Form 1040ES, which includes instructions for calculating quarterly payments. Estimated quarterly state tax forms may be obtained from state tax websites listed above.

(1c) Miscellaneous filing information.

Fellows' tax issues are covered in IRS publications:

  • Publication 17 - Your Federal Income Tax
  • Publication 520 - Scholarships and Fellowships
  • Publication 590 - Individual Retirement Arrangements (IRAs)
  • Publication 970 - Tax Benefits for higher education

For those who need a bit more time to file their tax returns, there is Form 4868, the application form for Automatic Extension of Time to File U.S. Individual Tax Returns. You still must pay at least 90% of the tax that is due when filing Form 4868, due April 15th, but then you have until August 15th to file your return.

Mr. Ed Everitt, a NIH employee in the Office of Financial Management, is available to answer IRTA tax questions. The fastest response will be if you e-mail your questions to him. Please include your telephone numbers in the e-mail and he'll more than likely call you with the response. Ed is also available to answer IRTAs' simple or quick questions during the day at the office tel: 301/496-5635. However if the questions require additional facts and/or figures, he'll ask you to call him at a later date when he can spend more time with you.

This is where the general information ends because there are too many "what if's" to cover everyone's particular situation.

REMEMBER:

  • It is very important to file (no later than April 15th) Form 1040, as well as the state forms. This is true even if you have already paid all your quarterly taxes for 2003 by January 15, 2004.
  • Extensions can always be filed if you need more time to complete the forms. However, if you owe taxes, you will still have to pay a percentage owed on April 15th.
  • IRTAs (and others who do not have taxes taken from their stipend checks) must pay quarterly taxes. Note that the first quarterly federal and state payments of *2004* taxes are due on April 15th, 2004, along with whatever taxes are owed for 2003.
  • If you have questions, ask!
If you work in the Bethesda area, there is an IRS office at 11510 Georgia Ave., Wheaton, MD 20902. No appointment is needed, but do plan on waiting awhile for an IRS agent to help you.

(2) IRTA, SENIOR STAFF FELLOWS and TENURE-TRACK SCIENTISTS REGULATIONS AT NIH

The following paragraphs were written to address the questions on fellowship status for IRTAs, Visiting Fellows and Senior Staff Fellows with regard to salaries and taxes.

Written by: Steve Benowitz, Director, Office of Human Resource Management, OD

At the NIH, we use different legal provisions to bring scientists to our laboratories. For Fellows (IRTAs and Visiting Fellows) we use sections of the law which authorize the NIH and its research program (Title 42 of the U.S. Code). Under this portion of the law, Fellows are permitted when the training is performed to advance the research skills and careers of the Fellows. Unlike other mechanisms, discussed below, the focus is on the value of the research to the Fellow rather than to the NIH. This portion of the law does not recognize Fellows as "employees," and, as a result, Fellows do not receive the same benefits as do employees. They do receive a stipend, which is highly competitive with other research organizations, health benefits, and are allowed absences for illness and vacation purposes. Based on an opinion of the NIH Legal Counsel, Fellows are not subject to Social Security and Medicare withholding or benefits. Fellows do not use a "full-time equivalency" (FTE); as a result, at times when the NIH is close or at its FTE ceiling, but funds are available, the laboratories have the flexibility to retain or hire additional Fellows. Unlike Fellows at universities, funding for NIH Fellows is stable, and is not subject to receipt of new or competing grants.

Other scientists (those beyond the post-doctoral IRTA and VF Programs) are "employees," and therefore have the same benefits as all other government employees (ie Senior Staff Fellows). For example, they are fully covered by FERS, health benefits and life insurance. They would have the same "rights" to set up IRAs as any other individual whose employer provides a retirement system. Individuals should check with their own tax advisor as to whether they can set up additional savings plans intended for retirement, e.g., IRAs, 401(k) plans, or, if married, could a spouse set one up in his/her name?.

(3) TAX ISSUES for VISITING FELLOWS

Written by: Dr. Philip Chen, Senior Advisor to the Deputy Director for Intramural Research, and Sylvia Funk, Chief, International Services Branch, Fogarty International Center

Tax treaties between the U.S. and foreign governments are negotiated by the State Department. These treaties address numerous tax issues, besides the benefits accorded to individuals working in the U.S. These benefits vary according to the country and the positions these individuals hold in the U.S. NIH has no input on any of this. Not all Visiting Fellows are eligible for tax treaty benefits. VFs from India, for instance, are not.

Because tax issues are so complicated, FIC has a tax contractor who meets once a month with all incoming visiting foreign scientists. He also holds six income tax return workshops around tax time. The Fogarty Center publishes each year a tax handbook for visiting foreign scientists. If you haven't received one, please visit Bldg. 16A and ask the receptionist for a copy. Should you have questions on whether or not you qualify for tax treaty benefits, please call your Fogarty immigration specialist at x66166 and ask to be scheduled to attend the next tax seminar.


Suggestions | 14 Nov 2003