NSF GRFP in California

[astroyogi]

Hi there, I'm off to grad school next year, happily with an NSF GRF, and am trying to create my budget as I look for housing, cars, etc. -- do any of you know how much you actually receive annually after taxes in California (not including any tax refund)? The sticker amount is $32,000/year. Thank you!

[AKJen]

I think it depends on the school.  Since it was an external fellowship, my school didn't take out taxes in advance, even when I was teaching.  This meant I needed to make sure to save about 15% each month to cover the tax bill.  I don't know if California would be able to charge an additional tax on it, since it isn't related to employment, but I'd check with your specific institution to be sure.

 

You probably won't get a refund, unless you've already paid a lot of income tax during the first part of this year when you weren't under fellowship.

[astroyogi]

Thank you!

[TakeruK]

California will charge an additional tax on it if you pay federal taxes on it, whether or not it's employment related. But does NSF count as a "California" source? If not, then you would only pay California state tax on it if you are a California resident (so perhaps not during your first year), since you generally only pay state tax on non-state-sourced income to your home state (which may or may not tax you at all).

 

15% is a good estimate of how much tax might be withheld if your school withholds it. With the personal exemption and standard deduction, your total taxable income is something just over $22,000, and you pay 10% on the first $9000 then 15% on the rest, so the total tax you'll probably pay is about $3000 to the IRS. (http://en.wikipedia.org/wiki/Income_tax_in_the_United_States). 

 

State tax is a couple of extra percentages but generally much less than federal taxes. So your total tax liability will probably be a little bit more than 10% but not that much. Of course, individual circumstances can change this number! But if your school withholds 15%, you can expect to get about $700-$1000 back after filing your return

[astroyogi]

Thanks so much TakeruK! That was extremely helpful 

[rabbit2013]

I found this calculator to be useful: http://www.tax-rates.org/income-tax-calculator/?action=preload

 

 

Keep in mind that this is for 2013 rates and that I can't speak to its accuracy for all states, but it might give you an idea of what to expect.