Hi Pamela,

In many most instances the individual tax code deems 'gifts' to be taxable -
John's best bet is probably going to be student exemption on FICA...

Take care!
James

JAMES M. SURPRENANT, MBA
Department of Surgery
BRIGHAM AND WOMEN'S HOSPITAL
Tel: 617-525-7409 ¨ Fax: 617-525-7723

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@hrinet.org] On Behalf Of
Pamela K Mott
Sent: Tuesday, April 28, 2009 10:14 AM
To: xxxxxx@hrinet.org
Subject: Re: [RESADM-L] FICA on student housing?

Certainly am not a tax professional, but couldn't the provision of housing be
set up as a "gift" to the students provided by the federal grant?

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@hrinet.org] On Behalf Of
Surprenant, James M.
Sent: Tuesday, April 28, 2009 9:04 AM
To: xxxxxx@hrinet.org
Subject: Re: [RESADM-L] FICA on student housing?

Strictly my opinion as its been years since I've worked as a tax professional,
but...

A) FICA is typically assessed against non-cash earned income or fringe benefits
such as housing.  The value of the housing would be 'imputed income' - in other
words, you would calculate the FMV of the housing and use that figure to
calculate social security taxes to be withheld on it.  (Income tax is not
withheld on imputed income.)

However...

B) It sounds like this would qualify as a student exemption to FICA - check out
IRS Pub 17 - you can find the relevant section I'm thinking about here:
http://www.irs.gov/charities/article/0,,id=120663,00.html

Best of luck,
James

JAMES M. SURPRENANT, MBA
Department of Surgery
BRIGHAM AND WOMEN'S HOSPITAL
Tel: 617-525-7409 ¨ Fax: 617-525-7723

-----Original Message-----
From: Research Administration List [mailto:xxxxxx@hrinet.org] On Behalf Of
John McCann
Sent: Tuesday, April 28, 2009 9:42 AM
To: xxxxxx@hrinet.org
Subject: [RESADM-L] FICA on student housing?

I would appreciate help with with this question::  With a congressional
earmark, we are running a five-week residential college preparatory
experience for low income, first generation high school students.  They
will spend five weeks in our dorms (housing cost paid by the grant) and
engage in research and other activities with our students and
professors.  Our business office insists that the students' housing cost
is subject to FICA, since the payment for housing (which is transferred
directly to our housing office from a grant account) counts as income.
This seems absurd to me.  What do you think?

--
John McCann, Ph.D.
Assistant Dean for Faculty Development and Sponsored Programs
Provost's Office
Southwestern University
P.O. Box 770
Georgetown, Texas 78627

Phone: 512-863-1233
Fax: 512-863-1262

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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")
======================================================================

======================================================================
 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")
======================================================================