FSUN Annual Training April 24, 2018 Payments to Students FSUN Annual Training April 24, 2018 Tax Management Office

Payments to Students What is a TMOG Tax Management Office Guideline Consistent treatment U is compliant in reporting requirements Easily modified Tax Management Office

Payments to Students Important Concepts Compensatory payments Reportable payments Taxable payments Impact on financial aid US Taxpayer/Nonresident alien – NRA Tax Management Office

Payments to Students Payment Systems Payroll System, including Company UNS Accounts Payable System Student Finance System Tax Management Office

Payments to Students Types of Reporting W-2 Form 1099MISC None required Tax Management Office

Payments to Students Wages Compensatory Job appointment Employer/employee relationship Paid through Payroll System W-2 income or 1042-S Tax Management Office

Payments to Students Payment to non-employee student for services No employer/employee relationship Atypical Paid through Accounts Payable 1099 if > $600 1042-S for all income Tax Management Office

Payments to Students Honorarium Compensatory Employment related? Payroll or Accounts Payable Tax Management Office

Payments to Students Human Subject Payment Not considered a payment for services U Policy: Paying Human Subjects Accounts Payable payment Reported on 1099 when > $600 or 1042-S Tax Management Office

Payments to Students Prize Student enters a contest Goes beyond scholastic achievement May impact financial aid if > $100 Reported on 1099 when > $600 or 1042-S Tax Management Office

Payments to Students Travel/Expense Reimbursement for U Business Primarily traveling on behalf of U Travel reimbursement or meal per diem Accounts Payable Accountable Plan substantiation requirements No reporting – not taxable Tax Management Office

Payments to Students Participant Payment Participating in U training program Support to allow participation Non-compensatory U student – Student Finance Non-U student – Accounts Payable Tax Management Office

Payments to Students Scholarship/Fellowship Aid a student in furthering academic, research and/or scholarly education of the student Non-compensatory No reporting requirements Qualified educational expenses nontaxable Non-qualified educational expenses taxable but not reportable Tax Management Office

Payments to Students Student Leaders and Other Volunteers Job Classification - wages No Job Classification - volunteer Payment not commensurate with efforts Employee for IRS purposes, not FLSA Tax Management Office

Payments to Students Other types of Payments Royalty Payments Internships At University At third party Gift Cards Tax Management Office

Payments to Students Get the facts What is the primary purpose of the payment? Is the recipient currently enrolled as a student at the U? Did recipient, or will recipient, provide services? Did recipient enter a contest to become eligible? Should payment be made as a lump sum? Tax Management Office

Tax Management Office Contact us at taxhelp@umn.edu 612-624-1053 Tax web site: www.tax.umn.edu Heather Broneak 6-6174 Tax Management Office