There are now additional reporting requirements for stipends and other
payments to students because of Public Law 107-131. Beginning 01/01/03,
Institutions will now be required to report scholarships or grants received
for the individual's costs of attendance that the institution administered
and processed during the calendar year. Institutions will report this
information on the 1098-T form which also reports tuition payments from
students.
Stephen Turner
Research Accounting
University of Arkansas
(479)575-6281
-----Original Message-----
From: Research Administration List [mailto:xxxxxx@HRINET.ORG] On Behalf Of
Herbert B. Chermside
Sent: Monday, June 23, 2003 12:28 PM
To: xxxxxx@HRINET.ORG
Subject: Re: [RESADM-L] Stipends
A "stipend" is not payment for services rendered. "Fellowship" is a
synonym. Both "stipend" and "fellow" are commonly misused by faculty, but
from the question I believe you are using it correctly. It is a payment to
an individual undergoing a specific training. Essentially it is a payment
to cover living needs and specifically does not provide a need for services
in return. In fact some programs prohibit the recipient from having a
"job" in addition. It is "income" for income tax purposes, but certain
costs may be excluded to find the total taxable income; see the tax
law. The institution does not have a legal duty to withhold income tax
both because it is not "wage income" (payment for services rendered), and
also cannot reasonably know what part is taxable because that amount is
very individualized to the taxpayer. It is not "wage income" for social
security and medicate tax/contribution purposes. If it is being handled
like "wage income", which almost always happens when the payroll system is
used, it is in error. The appropriate method of handling it outside of
payroll is somewhat at the convenience of the institution. It is not a
purchase, so a simple accounts payable could confuse that matter; our
institution does use accounts payable but has a classification that is not
"procurement". Some have paid it through student aid, but if you go that
route you have to be sure that you are very careful in the handling of it;
I know there are significant confusions in that area, but not what they are.
Incidentally, generally the recipient of a stipend has tenure in the
stipend so long as he/she is making reasonable progress toward the training
goal. However, the award terms need to be read carefully to determine
exactly what the measure of tenure is.
Chuck
At 09:17 AM 6/23/2003 -0400, you wrote:
>I would like to get some information on how other colleges and universities
>handle stipends on U.S. Dept. of Education grants. This has been an
>ongoing debate in our institution for quite sometime.
>
>Specifically how are they handled for tax purposes:
>How do you pay them? Through accounts payable, payroll or the Bursars
>office.
>Are they provided with a 1099?
>
>Thanks for your input!
>
>
>***************************************
>Lisa Heilman
>Grant Accountant
>234 Michael Schwartz Center
>330-672-0985
>330-672-2203 (fax)
>***************************************
>
>
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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:
Biotech One, Suite 113
Virginia Biotechnology Research Park
800 East Leigh Street
Richmond, VA 23219
Voice: 804-828-6772
Fax 804-828-2521
OFFICE e-mail xxxxxx@VCU.EDU
Personal e-mail xxxxxx@vcu.edu
http://www.research.vcu.edu/ospa.htm
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Instructions on how to use the RESADM-L Mailing List, including
subscription information and a web-searchable archive, are available
via our web site at http://www.hrinet.org (click on "Listserv Lists")
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======================================================================
Instructions on how to use the RESADM-L Mailing List, including
subscription information and a web-searchable archive, are available
via our web site at http://www.hrinet.org (click on "Listserv Lists")
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