I have a few tax-related questions pertaining to a Department of Education TRIO grant program, particularly Upward Bound.

1)       Do you process Upward Bound participant stipends through your Accounts Payable office or your Payroll office?
We currently process these payments through Accounts Payable since the participants are not enrolled as University students (they are high school students or recent high school graduates).

2)      If you process the stipend payments through the Accounts Payable office do you issue 1099s to each of the participants?
In the past we haven't, but we now have some participants reaching the $600 threshold.  However, our Upward Bound office says that these are not taxable or reportable stipends.  We do have a letter from the Department of Ed stating that the stipends aren't taxable, but I consider taxable and reportable to be different things.

3)      Have you ever had a non-US citizen participant receive Upward Bound stipends?
We have a participant that is applying for citizenship and meets the Upward Bound regulations for participation in the program.  However, this participant (Mexican citizen) only has a taxpayer ID number and does not have a passport or Visa.  We haven't processed any payments yet, but I'm thinking that we would need to do a 30% withholding on any payments to this participant.

Any input you could provide on any of the questions above would be greatly appreciated.

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Angela Carron
Truman State University
xxxxxx@truman.edu

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