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From: arnold@umcp-cs.UUCP
Newsgroups: net.college,net.taxes
Subject: Re: tax status for TA's and RA's
Message-ID: <4965@umcp-cs.UUCP>
Date: Thu, 2-Feb-84 18:40:26 EST
Article-I.D.: umcp-cs.4965
Posted: Thu Feb  2 18:40:26 1984
Date-Received: Wed, 8-Feb-84 03:14:09 EST
Organization: Univ. of Maryland, Computer Science Dept.
Lines: 44

The rules for teaching and research assistant stipends are loosely
stated below: There is an official IRS publication on Stipends,
Scholarships, and Grants.

According to the IRS in order to have your assistantship stipends
Tax-exempt you need:
	1) Working towards a degree.
	2) The work you are doing for your stipends is part of your
	   work for the degree.
	3) Everybody going for that degree has to do similar work
	   whether they are paid to do the work or not.
	4) The work your are being paid for is a serves to you not
	   the paying agent.

	Most teaching assistantships will be considered to be taxable
	income, since they are a service to the school not to you.

	Most research assistantships can get tax-exempt status, one
	needs a letter from their department stating why they are 
	tax-exempt. (This can cause havoc latter when income averaging
	or IRA filling).

	For teaching assistants there is some hope - one can claim
	only the taxable income that an equivalent student would get
	for teaching but not on an assistantship. 
	    Example: at the U of Md. a T.A. works 20 hours a week, the 
	    going rate of pay is $5.00 an hour for compatible work
    	    by the U.'s pay scale there for only $100 per week is 
	    taxable the rest is stipends to live on.  This  does not
	    help much since U of Md. T.A.'s only make $140 per week
	    but it helps.

When filling your stipends or part of it as tax-exempt income
you need a letter from your department as for the reasons why.
There is not section on the IRS tax form for this type of exemption
it has been recommend to use the Alimony line for your tax-exempt
income and claim your entire w-2 income on the gross income line.


-- 
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Arnold Miller, U of Maryland, College Park Md.
UUCP:	{seismo,allegra,brl-bmd}!umcp-cs!arnold
CSNet:	arnold@umcp-cs 	ARPA:	arnold@maryland