A true "fellow" -- holder of a fellowship, gains no benefits.  Benefits are
a contractual/tax responsibility related to salary and wage, i.e.,
employment.  There is explicitly no employer-employee relationship with a
fellowship.  See "stipends", p. 182 of the NIH GPM.

Health insurance for the fellow is an allowable cost on the
proposal/award.  Presumably you have a way to pay them, and charge it to
the grant.  Here we have the problem that the fellow cannot be on our
University health plan because it is, by law, limited to employees.  Our
fellows got together years ago and formed a group for health insurance; we
give administrative support for the group in the VP-R's office.

Again, be very clear that the holder of a fellowship is NOT in an
employer-employee relationship.  But also realize that "fellow" is a term
commonly bandied about inappropriately, and may well be ill-used to refer
to someone who IS in an employer-employee relationship.

Chuck

At 12:42 PM 10/2/2003 -0500, you wrote:
>How do you pay benefits if not through the payroll system.
>
>Pete
>
>-----Original Message-----
>From: Herbert B. Chermside [mailto:xxxxxx@VCU.EDU]
>Sent: Thursday, October 02, 2003 10:30 AM
>To: xxxxxx@HRINET.ORG
>Subject: Re: [RESADM-L] Informal survey regarding the withholding of FICA on
>NRSA stipend payments
>
>
>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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>
>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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>subscription information and a web-searchable archive, are available  via
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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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