POSTDOC TAX INFORMATION

What do the different rank codes mean, and how do they affect my taxes?

Code 27: Postdoctoral Fellow/Trainee—An individual with an earned doctorate, who holds a sponsored postdoctoral fellowship or traineeship, who is engaged in postdoctoral training through research for a fixed period of time, but no more than five years, and receives a stipend or training allowance.

Code 28: Postdoctoral Research Associate—An individual with an earned doctorate, who is engaged in postdoctoral training through research for a fixed period of time, but no more than five years, and receives compensation for services performed.

Code 27 is exempt from the Federal Insurance Contribution Act (FICA); code 28 is not. For postdocs categorized as code 27, completion of the “Certification of Non-Service Requirements of Scholarship/ Fellowship for Social Security Withholding Purposes” form certifies that the postdoctoral fellow/trainee meets the criteria for FICA tax exemption. The form can be accessed at http://hr.unc.edu/files/2012/11/Certification-of-Non-Service-Requirement-of-Scholarship-Fellowship.doc.

The FICA tax exemption pertains to stipends and training allowances associated with fellowships, traineeships, or services as an independent contractor that are carried out at UNC-Chapel Hill. These stipends and training allowances are not subject to the FICA tax because the payments are not compensation for services as an employee.2

For more information on this policy, see http://financepolicy.unc.edu/1111_1rd.