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

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

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

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

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

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

7. 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

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

9. 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

10. 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

11. 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

12. 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

13. 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

14. 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

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

16. 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

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