Compliance Risks for Non-U.S. Student Financial Aid: Part 1

As colleges and universities continue expanding their global reach, compliance requirements related to payments made to foreign students and scholars have become increasingly complex. From scholarship withholding rules to treaty documentation requirements, institutions must understand their responsibilities under Form 1042 reporting obligations.

In this episode of Cherry Bekaert’s Not-for-Profit podcast series, Melanie McPeak, Managing Director and Tax Leader of the Firm’s Not-for-Profit Industry practice, is joined by Tahira Nagda, Managing Director and Compliance & Provision Lead in Cherry Bekaert’s International Tax practice. Together, they discuss key compliance considerations surrounding Form 1042 reporting for payments made to non-U.S. students and scholars.

Listen to learn about:

Form 1042 reporting requirements
Who qualifies as a foreign person
Tax treatment of scholarships and stipends
Common withholding rates and treaty exemptions
Required documentation, including Forms W-8BEN and 8233
Honoraria and common payment classification issues
IRS audit focus areas for higher education institutions
Penalties and risks tied to noncompliance

This episode is part one of a two-part series on Form 1042 compliance for foreign students and scholars. Cherry Bekaert’s Not-for-Profit and International Tax teams help higher education institutions navigate complex withholding and reporting obligations while strengthening compliance processes.

View all podcast in this series