An NRSA stipend for a fellow, i.e., a fellowship award (as opposed to the
causal use of "fellow") is explicitly NOT a "wage" payment.  No FICA should
be withheld.  Further, though the income is taxable to the individual, the
payor cannot know how much of it is taxable, and there is no requirement to
withhold income taxes.  A 1099 is appropriate.  I am well aware of a
situation in which an institution treated fellowships as salary and wage,
and as a result, nearly lost all NIH funding.

Suggestion:  Find a way to pay a true fellowship other than through the
payroll system.  This eliminates these questions.

Chuck

At 09:49 AM 10/2/2003 -0500, you wrote:
>We would like to know how many institutions are currently withholding and
>paying FICA taxes on NRSA stipends.  It is clear that the school's portion
>cannot be charged directly to the NRSA award, but it seems as if the IRS and
>NIH may not agree on whether a payment is required or not.
>
>Thanks
>
>Peter Marabella
>Director Grants & Contracts
>Baylor College of Medicine
>
>
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