Hi,

I have a query of those institutions that receive REU supplements; are
employee or fringe benefits an allowed charge?  If you allow the students to
be paid through your payroll system, how do you handle any partial fringe
benefit charges that may accrue?

I am aware applicants must request student support on line F (Participant
Support Costs) of form 1030 which does not allow for partial (or any) fringe
benefits, yet we allow students to be paid via our payroll system and some
times the charges accrue fringes.

The REU guidelines are thin in this topic but do state:

[Special Note: A grantee may pay stipends as scholarships or wages as it
determines appropriate. In either case, money received by individuals may be
taxable income under the Internal Revenue Code of 1986 and may also be
subject to state or local taxes. Grantees should provide students with
copies of the United States Internal Revenue Service Publication 4,
'Student's Guide to Federal Income Tax.' If stipends are paid as
scholarships, grantees are also encouraged to provide copies of IRS
Publication 520, 'Scholarships and  Fellowships,' to participants. Questions
regarding applicable Federal taxes should be directed to the IRS. Grantees
should also provide participants with information on any applicable state or
local taxes.]

I look forward to reviewing your opinions.

Thanks, Andy

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Andy Shepard                                       Phone: (603) 862-2436
Office of Sponsored Research              Fax: (603) 862-3564
University of New Hampshire            Email: xxxxxx@unh.edu
Durham, NH 03824-3585                http://www.unh.edu/osr/index.html
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