Fellowships and scholarships have unique taxation rules that depend on the use of the funds. The University, as a withholding agent, is not required to withhold on fellowships or scholarships unless the recipient is a nonresident alien.

A true scholarship will be reported by the University of Michigan on a
Form 1098-T. 

If you are a U.S. citizen or resident alien, you will not receive a form at calendar year-end with reporting information about your fellowship.  If you require documentation, you may request a letter from the Payroll Tax Section that states the amount of your fellowship.  To receive a letter, please send an email with your name, UMID, and address to lynnmull@umich.edu

If you are a nonresident alien, you will receive a Form 1042S at calendar year-end for the amount you received in fellowship or scholarship funds.

There are seminars held during the year to aide students in reporting fellowship funds when filing their tax forms.  To see a document produced by the University of Michigan Tax Manager on this subject click here:

http://www.tax.umich.edu/Stu%20schol%2007.pdf