Short answer: a "full scholarship" does not always mean zero U.S. tax. The parts that cover tuition, required fees and required course materials are tax-free, but the parts that cover room, board and travel are taxable. For F-1 students, the taxable part is generally withheld at 14% and reported on Form 1042-S. The student article of the U.S.–Japan tax treaty (Article 19) only exempts money that comes from outside the United States, so it does not cover a U.S. college's athletic scholarship. This post is general information as of October 2026, not personal tax, legal or immigration advice. Confirm your own filing with your international student office (DSO) and a tax professional.
For the full picture of playing college soccer in the U.S., see our U.S. college soccer guide. This post is for families comparing aid offers and for players already enrolled who get an unfamiliar tax form in January. It explains how scholarship tax works and which forms come up each year. Judge an offer by its real after-tax cost and how it fits your family budget, not by the headline number: fit, not name.
The answer in three lines
Start with these three points.
| # | Point | Basis |
|---|---|---|
| 1 | Tuition, required fees and required materials are tax-free; room, board and travel are taxable | "Qualified scholarship" under Internal Revenue Code §117 |
| 2 | For F-1 students, the taxable part is generally withheld at 14% and reported on Form 1042-S | IRS withholding guidance |
| 3 | U.S.–Japan treaty Article 19 covers only payments from outside the U.S. | Treaty text and an IRS practice unit |
What is tax-free and what is taxable
Whether scholarship money is taxable depends on what it pays for. It does not matter whether it is called athletic or academic aid.
| Part of the scholarship | Tax treatment (general rule) |
|---|---|
| Tuition | Tax-free |
| Fees required for enrollment | Tax-free |
| Books, supplies and equipment required for courses | Tax-free |
| Room (housing) | Taxable |
| Board (meal plan) | Taxable |
| Travel | Taxable |
| Cash for living costs (e.g. a stipend) | Generally taxable (confirm with the school) |
The IRS explains that only the "qualified scholarship" part (tuition, required fees and required course materials) is excluded, and the rest is taxable. If your full scholarship includes housing and a meal plan, that portion is taxable.
Schools differ in how they allocate aid between tuition and room and board. Ask the financial aid office or student accounts (bursar) for your actual figures.
Why the U.S.–Japan treaty does not help here
Article 19 of the U.S.–Japan tax treaty exempts payments a student receives for maintenance, education or training only if those payments come from outside the country where the student is studying.
For a Japanese student in the U.S., that means money from outside the U.S., such as support sent by parents in Japan. A U.S. college's scholarship comes from inside the U.S., so Article 19 does not cover it. An IRS international practice unit uses Japan's Article 19 as its example. It says the article only exempts payments from Japan, and that payments from inside the U.S. fall under the Internal Revenue Code instead.
Some other countries' treaties do exempt U.S. scholarships, which is why online advice saying "the treaty makes scholarships tax-free" may not apply to Japanese students. Article 20 covers teachers and researchers, not students.
The 14% withholding and how to read Form 1042-S
For nonresident students in F, J, M or Q status, the withholding rate on the taxable part of a U.S. scholarship drops from the usual 30% to 14%. The school reports the taxable amount and the tax withheld on Form 1042-S, usually early in the new year.
Worked example
This follows the example in IRS Publication 4011.
| Item | Example amount |
|---|---|
| Tuition and fees | $25,000 (tax-free) |
| Required books, supplies and equipment | $1,000 (tax-free) |
| Room and board | $9,000 (taxable) |
| Form 1042-S box 2 (taxable amount) | $9,000 |
| Form 1042-S box 10 (tax withheld) | $1,260 (14% of $9,000) |
Form 1042-S does not show the tax-free part, only the $9,000 taxable amount. Scholarship income uses income code 16. You use this form when you prepare your Form 1040-NR.
Keep in mind that 14% is only what is withheld up front. Your final tax is calculated on the 1040-NR, so you may owe more or get some back. Some schools bill the withholding to your student account rather than taking it out of the award, so read your statements carefully.
Your forms each year: 8843, 1040-NR and an ITIN
The two forms every F-1 student should know are Form 8843 and Form 1040-NR. If you have a taxable scholarship but no Social Security number (SSN), you may also need an Individual Taxpayer Identification Number (ITIN).
| Form | Purpose | Typical deadline (2026 tax year) |
|---|---|---|
| Form 8843 | Shows you are a student whose days of presence are excluded | Attach to the 1040-NR; if no return is required, mail it alone by the 1040-NR due date |
| Form 1040-NR | Nonresident income tax return | April 15, 2027 if you had wages with withholding; June 15, 2027 if not |
| Form W-7 (ITIN application) | Taxpayer number for people without an SSN | Apply early once you know you need one |
Key points:
- Form 8843: According to the IRS instructions, students and other "exempt individuals" file Form 8843 to explain why their days in the U.S. don't count toward the residency test. If you don't need to file a tax return, you still mail Form 8843 by the due date.
- Form 1040-NR: The IRS treats an F-1 student with taxable U.S. scholarship income as engaged in a U.S. trade or business. The 2025 Form 1040-NR instructions set the due date at April 15 for people with wages subject to withholding, and June 15 for everyone else. If the same rule applies, 2026 returns are due April 15, 2027 or June 15, 2027 (the next business day if the date falls on a weekend or holiday). Check the current instructions.
- ITIN: An ITIN is for people who don't have and aren't eligible for an SSN. The Form W-7 instructions include an exception for students receiving taxable scholarship income and an application reason (reason f) for nonresident students. If you can get an SSN, for example through an on-campus job, you use the SSN instead.
January–June calendar (example)
| When | What to do |
|---|---|
| January–March | Your school sends Form 1042-S (and a W-2 if you worked) |
| February–March | Check the tax software or workshops your international office offers |
| By April 15 | If you had wages with withholding, file the 1040-NR with Form 8843 |
| By June 15 | If you had no wages with withholding, file the 1040-NR (or Form 8843 alone) |
State income tax rules vary by state. Check your school's state guidance and ask your international office whether you need a state return.
Free consultation: We help you read aid offers at their true after-tax cost. Book a free NextPitch consultation.
On-campus jobs, CPT and OPT: income tax yes, FICA generally no
F-1 students who have been in the U.S. for fewer than five calendar years are generally nonresident aliens for tax purposes. According to the IRS, wages from work that USCIS allows, such as on-campus jobs and practical training (CPT or OPT), are exempt from Social Security and Medicare taxes (FICA). Income tax still applies.
If FICA is withheld by mistake, first ask your employer for a refund. If that fails, you can claim it from the IRS using Forms 843 and 8316.
For getting an SSN and a bank account, see your first month in the U.S.: SSN, bank and phone. For CPT and OPT, see the OPT and CPT career map.
Build tax into your budget and offer comparison
When you compare offers, subtract the tax on the room-and-board portion instead of looking only at the total aid. Two "full scholarships" can produce different taxable amounts if one covers more housing and meals.
| What to check | Why |
|---|---|
| How much covers tuition, fees and materials | The tax-free part |
| How much covers room, board and travel | The taxable part |
| Whether withholding comes out of the award or is billed to you | Affects your cash plan |
| Whether the state has an income tax | Depends on where the school is |
| How it shows on your I-20 proof of funds | Ask the international office |
For how to work out your real cost, see true out-of-pocket cost. For setting offers side by side, see comparing athletic offers.
Checklist: before enrolling and in year one
- Got a written breakdown of the aid (tuition, fees, room, board)
- Confirmed the taxable portion and how the 14% withholding is handled
- Kept your passport, I-20 and entry records together
- Checked whether you can get an SSN (job plans), and the ITIN route if not
- Confirmed how you will receive Form 1042-S and any W-2 (mail or online)
- Noted the international office's tax workshop dates
Who can help
Your main sources of help are the international student office, the tax software your school provides, and a tax professional. Many schools offer online tax software built for nonresident returns, along with workshops. Use whichever tool your school recommends.
| Who | What they can help with |
|---|---|
| International student office (DSO) | Which forms apply, school guidance, the ITIN process |
| Student accounts / payroll | What's on your 1042-S and W-2, withholding amounts |
| Athletics compliance | Aid and benefit conditions under NCAA rules |
| Tax professional | Your specific return and any Japan-side questions |
Name, image and likeness (NIL) income raises F-1 work-authorization questions as well as tax ones. If you are considering NIL, talk to your international office first.
FAQ
Q. Do I have to file anything if I had no income? A. According to the IRS, F-1 students file Form 8843 even with no income, so their days in the U.S. are excluded from the residency test. If no 1040-NR is required, you mail Form 8843 by the deadline. Confirm your situation with your international office.
Q. Does Japan tax this too? A. That depends on things like whether you count as a resident or nonresident of Japan under Japanese tax law. This post cannot answer that, so check with a Japanese tax accountant or Japan's National Tax Agency guidance.
Q. Is money my parents send from Japan taxed? A. On the U.S. side, Article 19 of the treaty exempts payments a student receives from outside the U.S. for maintenance or education. The IRS practice unit says it covers payments from Japan. Ask a tax professional in Japan about the Japanese side, such as gift rules.
Q. What if I miss the deadline? A. The 1040-NR instructions say late filing can bring interest and penalties. Filing Form 8843 late can also stop you from excluding your days of presence. Contact your international office and a tax professional as soon as you notice.
Q. If 14% was withheld, am I done? A. No. The 14% is withheld up front. Your final tax is calculated on the 1040-NR, so you may owe more or receive a refund.
Once you're on campus, our guide to missing class for away games covers balancing travel and coursework.
Summary
- Even with a full scholarship, the room, board and travel portion is taxable.
- For F-1 students, the taxable part is generally withheld at 14% and reported on Form 1042-S (income code 16).
- U.S.–Japan treaty Article 19 only covers money from outside the U.S., not a U.S. college's scholarship.
- File Form 8843 every year, and Form 1040-NR when required. For 2026, the usual deadlines are April 15 or June 15, 2027.
- Judge fit by the true after-tax cost, not the name or the headline total.
- Confirm your own filing with your international office and a tax professional.
Free consultation: We help you read aid offers at their true after-tax cost. Book a free NextPitch consultation.
Sources (checked October 2026): IRS, "Withholding on specific income"; IRS, "Federal income tax withholding and reporting on other kinds of U.S. source income paid to nonresident aliens"; IRS Pub. 4011 (2026 returns); IRS Pub. 519 (2025 returns); Instructions for Form 8843 (2025); Instructions for Form 1040-NR (2025); Instructions for Form W-7; IRS, "Foreign student liability for Social Security and Medicare taxes"; U.S.–Japan Income Tax Convention (signed Nov. 6, 2003), Article 19; IRS International Practice Unit on treaty student articles.