Angela,

This is our view of the world,

1) accounts payable
2) we consider them 1099 reportable, we do not define them as a "scholarship" if they do not go through financial aid.
3) for a foreign national, look a the tax treaty with the county to determine the amount to withhold

Hope this helps.

Charlene Blevens, CPA, CFE, CRA, MBA
Assistant Vice President & Deputy Controller
Florida International University
305-348-1122
305-934-8755
________________________________________
From: Research Administration List [xxxxxx@hrinet.org] On Behalf Of Angela Carron [xxxxxx@TRUMAN.EDU]
Sent: Tuesday, August 31, 2010 4:04 PM
To: xxxxxx@hrinet.org
Subject: [RESADM-L] grant stipend payments

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.

-------------------------------------------
Angela Carron
Truman State University
xxxxxx@truman.edu

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