All income is taxable.
The paying organization has responsibility to collect (withhold) income
taxes and social security/medicare on salary or wage paid as compensation
for services.
The paying organization does not have the responsibility to collect social
security/medicare on full time students of their own organization.
The paying organization does not have the responsibility for collecting
income taxes and social security/medicare for fellowship/traineeship.

The word "stipend" is very confusing.  By the dictionary, it means
"periodic payment", and does not normally carry information regarding the
purpose for the payment.

"Stipend" is used by most federal agencies for fellowship/traineeship
payments.  These are payments for an explicitly training relationship.

"Salary" or "Wage" payments are compensation for services.  GRA's and other
students paid on any other grant than a fellowship/traineeship, e.g.,
research and instruction grants, are paid for the services they render.

In the university setting an individual receiving a fellowship and one
receiving a salary/wage may be the same, because the nature of training is
on-the-job, so it is the source of support, not the nature of the job, that
determines the need for withholding.

Chuck

At 04:20 PM 9/13/2002 -0400, you wrote:
>Our payroll office views student stipends on grants as taxable
>compensation. However, one of faculty members believes that there are
>categories of student stipends that should not be taxable.  Can anyone
>point us to an authoritative resource on this issue? Thanks.
>
>
>Donna Berger
>Coordinator, Academic Grants
>Marist College
>Phone: 845-575-3670
>
>
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Herbert B. Chermside, CRA
Director, Sponsored Programs Administration
Virginia Commonwealth University
PO BOX 980568
Richmond, VA  23298-0568
Express Delivery Only:
 Sanger Hall, Rm. 1-032A
 11th & Marshall Streets
 Richmond, VA  23219
Voice:  804-828-6772
Fax     804-828-2521
OFFICE e-mail   xxxxxx@VCU.EDU
Personal e-mail xxxxxx@vcu.edu
http://views.vcu.edu/ospa/

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 via our web site at http://www.hrinet.org (click on "Listserv Lists")
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