Berkeley Registrar’s Office
Berkeley Graduate Studies Handbook
UCSF Registrar’s Office
UCSF Graduate Division Financial Support
Defined Contribution Plan (DC Plan)
The University of California is required by law to make social security contributions or provide a safe harbor provision retirement plan for graduate students, the Defined Contribution Plan (DC Plan). UC-employed Graduate Students are required to contribute to the DC Plan Pretax Account through payroll withholding. These funds are available to the student when they leave the University, at which time the funds may be rolled into an IRA or employer-sponsored retirement plans.
For additional information regarding DC Plan and Medicare, contact:
• UC Benefits Customer Service at (800) 888-8267 x 70651
• UCSF Benefits Office at 476-1400
• HR Assistant processing your appointment.
Online DCP References:
UCSF Human Resources
Berkeley U.C. Defined Contribution (DC) Plan
IMPORTANT NOTE: One complication with training grants (and most other nonwage awards, including the NSF Graduate Research Fellowship) is that there are laws that have made this income taxable, yet no taxes are withheld. Consequently, to avoid owing penalties for late taxes, some students must either file quarterly estimated taxes or request that additional tax be withheld from any wage-type job (e.g. R.A. or T.A.) the student holds while on the training grant or fellowship. Most of the administrators on campus are forbidden by the school from giving tax advice, but copies of the tax forms can be found at the Berkeley Public Library in downtown Berkeley. The estimated tax forms and instructions are also available for download from the IRS website. Further details and resources for taxes are provided below.
Fellowship and Training Grant Income
The University does not issue a Form 1098 or W-2 for fellowships or training grants to degree candidates, and does not withhold taxes from the stipend portions of fellowships or training grants. Fellowship and grant funds used to pay tuition, fees, and course-related expenses are not subject to tax, but funds used for living expenses are taxable. Students should therefore report the portion of their awards used for living expenses as income and are responsible for the payment of estimated taxes. Students on a non-immigrant visa (F-1 and J-1) are in an exceptional category, and must consult with the HR representative in the Faculty Sponsor’s department.
Payroll Appointments: GSR and GSI
Students who receive some or part of their funding through GSR and/or GSI appointments receive wages, (payments for services), which are subject to income tax withholding. The University will issue a W-2 to any student who held a payroll appointment at the end of each calendar year identifying total income received and taxes withheld. Tax withholding amounts may be adjusted by completing a W-9 form, which should be available in the office where the payroll appointment is set up.
The University reports awards made to international students to the IRS. A percentage of such fellowship stipends is withheld for federal tax, unless the student’s home country has a tax treaty with the United States that exempts its citizens from withholding. State tax is withheld for international students and other nonresidents of California if they receive over $1,000 per month or $10,000 per calendar year. Students may call the Foreign Tax Unit of the disbursements Office (415/642-3002) to see if there are tax treaties between the United States and their country of residence.
Tax breaks for Graduate and Professional Students
The 1997 Taxpayer Relief Act includes substantial tax breaks for college students and their families. Graduate students who have children or other family members attending college may qualify for the Hope Scholarship Tax Credit for undergraduate study, and graduate students repaying student loans may qualify for the student loan interest deduction. For more information on the educational provisions of the 1997 Taxpayer Relief Act, see the Loans and Receivables Office Web site:
More information is available in the following IRS publications:
Educational Expenses 508
Highlights of the Tax Reform Act of 1986 1339
Scholarships and Fellowships 520
Tax Withholding and Estimated Tax 505
U.S. Tax Guide for Aliens 519
U.S. Tax Treaties 901
Your Federal Income Tax 17