Fellowship income on TN -- proper handling of taxes

[siqister]

Hi all, I was directed from another forum to pose the following question here regarding the proper handling of taxes for research/post doc fellows on TN status.

I'm due to start a research fellowship at a university. The university will put me on TN status, and as I've been in the US for a few years I will be a tax resident.

The university has also informed me that my fellowship pay will be considered "unearned income", and as such will not be subject to any tax withholding (fed state or FICA), nor will I receive any tax forms. I am however responsible for fed and state income taxes and will need to make estimated quarterly payment.

Just curious: is this common? The basis of this arrangement seems to be this:
http://vpf.mit.edu/site/content/download/8307/43245

I guess ultimately the payroll department will follow their own guidelines. I'm just a little concerned about any future ramifications for me. And what kind of record keeping do I need come tax time?