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Comptroller's Office
Guidelines For Payments To Individuals
For tax purposes payments to individuals at Syracuse
University fall into two
basic categories.
- Payments for which
no past, present or future services are required to be performed by
the recipient.
- Payments which do
require past, present, or future services to be performed by the
recipient.
a. Compensation as employees
b. Payment to independent
contractors
Within these categories, the rules for taxation are based upon the
recipient's status of U.S. Citizen, Permanent Resident, or Nonresident
Alien.
1. PAYMENTS
FOR WHICH SERVICES ARE
NOT REQUIRED - STIPENDS
As defined by the Internal Revenue Service,
scholarships are amounts paid for the benefit of a student at an
educational institution to aid in the pursuit of studies, and fellowships
are amounts paid for the benefit of an individual in the pursuit of study
or research.
A qualified scholarship or fellowship grant
is tax free only if the recipient is a candidate for a degree at an
educational institution.
Qualified scholarship and fellowship grants
are amounts paid for tuition and fees required to enroll in, or to attend
an educational institution, or fees, books, supplies, and equipment that
are required for the courses at the educational institution.
Amounts paid for incidental expenses are
taxable. Incidental expenses include expense for room and board, travel,
research, clerical help, equipment, and other items not required for
either enrollment or attendance at an educational institution, or in a
course of instruction at the educational institution.
The following table indicates the tax
treatment of scholarship and fellowship payments:
|
Payment
for
|
Degree
candidate
|
Not a
degree candidate
|
|
|
|
|
|
Tuition
|
Tax free
|
Taxable
|
|
Fees
|
Tax free
|
Taxable
|
|
Books *
|
Tax free
|
Taxable
|
|
Supplies *
|
Tax free
|
Taxable
|
|
Equipment *
|
Tax free
|
Taxable
|
|
Room
|
Taxable
|
Taxable
|
|
Board
|
Taxable
|
Taxable
|
|
Travel
|
Taxable
|
Taxable
|
*Required of all students in a course of
instruction at an educational institution
U.S.
Citizens and Permanent Residents
U.S.
Citizens and Permanent Residents must have a Social Security Number in order
to receive a scholarship or fellowship from Syracuse
University.
By law, the grantor of scholarships and
fellowships to United States
Citizens and Permanent Residents of the United
States is not required to report these
payments to the Internal Revenue Service or to the recipient. Likewise,
there is no tax withholding required. It is the responsibility of the
individual receiving the scholarship or fellowship to determine whether
it is taxable to him/her, and to report such
payments as required on his/her tax return.
Internal Revenue Service Publication 970 -
"Tax Benefits for Education", provides additional
information, and may be obtained from the Internal Revenue Service web
site or by calling 1-800-829-3676.
Nonresident Aliens
Nonresident Aliens must have a Social
Security Number or an Individual Taxpayer Identification Number in order
to receive a scholarship or fellowship from Syracuse
University.
Non Qualified Scholarships and fellowships
given to Nonresident Aliens must be reported to the Internal Revenue
Service and to the recipient on Form 1042S.
Qualified scholarships (scholarships for
tuition and fees required for enrollment at Syracuse
University) granted to
candidates for a degree are not subject to tax withholding. Absent the
existence of a tax treaty with an appropriate provision, scholarships and
fellowships that are not applied directly to tuition and fees required to
enroll in, or to attend an educational institution, or that exceed such
fees, when given to Nonresident Aliens must have taxes withheld (at a
rate of 14% for individuals on an F, J, M, or Q visa), even if the excess
moneys are used for the purposes described above as being tax free. Where
appropriate, the individual may apply for a tax refund upon filing
his/her annual income tax return (Form 1040NR).
Absent the existence of a tax treaty with an
appropriate provision, all scholarships or fellowships (qualified and not
qualified) for study, training or research at an educational institution
granted to individuals who are not candidates for a degree, that are
present in the U.S. on an F, J, M, or Q visa, are subject to withholding
at 14 %.
Non Qualified Scholarships and fellowships
other than those described above are subject to withholding at 30%.
To enable the University to determine the
proper tax status for a nonresident alien fellowship recipient, for each
calendar year it is necessary for the individual to complete a Non-Resident
Alien Information Form and return it to the Comptroller's Office. The
form and the instructions for completion of the form are available on the
Comptroller's Office website at http://AMASweb.syr.edu/comptrol/nonresident.htm.
Based upon the information provided, the individual's proper tax status
will be determined. Any additionally required forms will be sent to the
individual for signature and return.
Internal Revenue Service Publication 519
"Tax Guide For Aliens" , provide additional
information, and may be obtained from the Internal Revenue Service web
site or by calling 1-800-829-3676.
Processing Requirements
Regardless of how a scholarship or fellowship
payment is spent by the recipient, these type of payments are financial
aid expenses to the University. Accordingly, the appropriate object codes
must be charged, and the appropriate University forms must be used.
Requests for scholarships and fellowships
to undergraduate students against non-sponsored accounts
must be submitted to General Accounting on a "Grant
Authorization Form."
Requests for tuition scholarships to undergraduate
students on sponsored projects must be submitted to Sponsored
Accounting on a "Scholarship Tuition Information
Sheet."
Requests for fellowship payments to undergraduate
students on sponsored projects must be submitted to Sponsored
Accounting on a "Monthly stipend Information Sheet."
Requests for payments of scholarships and
fellowships to graduate students on non Sponsored accounts by
University departments other than the Graduate school are submitted to
General Accounting on a "Monthly Stipend Information Sheet."
Requests for tuition scholarships to graduate
students on sponsored projects must be submitted to Sponsored
Accounting on a "Scholarship Tuition Information
Sheet."
Requests for fellowship payments to graduate
students on sponsored projects must be submitted to Sponsored
Accounting on a "Monthly Stipend Information Sheet."
Requests for fellowship payments to employees
or for reimbursements to employees for incidental
expenses must be processed on an "Employee Expense Voucher."
It is important to realize that requiring receipts does not change the
nature of the payment or have any effect on taxability.
Requests for fellowship payments to students
or for reimbursements to students for incidental
expenses must be processed on a purchase requisition. It is important
to realize that requiring receipts does not change the nature of the
payment or have any effect on taxability.
Under no circumstances should
scholarships, fellowships, grants, or any other payment for which
services are not required, take the form of a direct purchase or payment
to a vendor on behalf of the recipient.
Questions regarding the payment of
scholarships, fellowships and grants should be directed to the Office of
the Comptroller at X5373.
2. PAYMENTS
FOR WHICH SERVICES ARE
REQUIRED
Payments for services fall into two
categories; employees and independent contractors. The primary factor in
distinguishing between these classifications is the degree of control
over the individual performing the services.
2a. COMPENSATION
AS EMPLOYEES
If the University exercises control and
direction of the individual performing the services, the individual is an
employee. Payments to such individuals for which any past, present, or
future teaching, research, or performance of other services is required
to be performed for the University, an awarding agency, or any other
party, are taxable compensation, subject to withholding of Federal and
State income taxes, as well as FICA tax, and must be paid through
Payroll. This includes payments to candidates for a degree, even if all
candidates for a degree are required to perform the services to receive
the degree.
Grants for lecturing, teaching or to perform research
in the United States,
as well as abroad, are payments for services, subject to U.S.
income tax. This includes cash reimbursement for transportation expenses
and the value of transportation furnished in kind. Professors and
teachers regularly employed by an educational institution in the United
States, temporarily absent (less than
1 year) from the school to teach or lecture abroad, generally may deduct
travel expenses. This includes the cost of ordinary and necessary
traveling expenses while away from your tax home, including meals and
lodging, for the duration of the stay. These deductions apply only to the
expenses of the professor/teacher, and not to
any expenses for any person who may accompany the professor/teacher. The
requirements for classifying travel expenses as nontaxable business
expenses are explained in the document entitled "Syracuse University
Guidelines For Travel Advances and Substantiation of Travel."
U.S.
Citizens and Permanent Residents
U.S.
Citizens and Permanent Residents must have a Social Security Number in
order to receive payment from Syracuse
University as an employee.
Payments to U.S. Citizens and Permanent
Residents for services as an employee are taxable income, subject to FICA
withholding, Federal Income Tax, and New York State Income Tax
withholding based upon the withholding form (Federal-W-4, NYS-IT
2104) completed by the individual. The University is required to
report wage payments and taxes withheld on Form W-2 to the recipient and
to the IRS.
Nonresident Aliens
Nonresident Aliens must have a Social
Security Number in order to receive payment from Syracuse
University as an employee. In
addition, the individual must be present in the United
States on a Visa that permits
employment. The Office of International Services should be consulted to
verify visa type and eligibility prior to hiring a Nonresident Alien.
Absent the existence of a tax treaty,
payments to a Nonresident Alien for services as an employee are taxable
income, subject to withholding based upon the withholding form (Federal
W-4) completed by the Nonresident Alien. The University is required to
report these wage payments and taxes withheld on Form W-2 to the
recipient and to the IRS. *Payments
for services performed outside of the United States are not taxable or
reportable.
The existence of a Tax treaty between the
individual's country of residence and the U.S. with a provision for
payments as an employee may result in an exception to the withholding
requirement, if the individual meets the terms of the treaty. These terms
may pertain to length of stay in the U.S. and/or the amount of the
payment. Wage payments exempt from withholding by treaty are required to
be reported to the recipient and the IRS
on Form 1042-S.
To enable the University to determine the
proper tax status for a nonresident alien employee, for each calendar
year it is necessary for the individual to complete a Non-Resident Alien
Information Form and return it to the Comptroller's Office. The form and
the instructions for completion of the form are available on the
Comptroller's Office website at http://AMASweb.syr.edu/comptrol/nonresident.htm.
Based upon the information provided, the individual's proper tax status
will be determined. Any additionally required forms will be sent to the
individual for signature and return.
Processing Requirements
An individual is hired as a University
employee by means of a "Job Action Notice" (JAN) and
a "Demographic Action Notice" (DAN).
Changing the appointment of an existing
University employee, requires a "Job
Action Notice" (JAN).
Payment of weekly wage payments
requires weekly on-line time input and approval.
Payment of semi-monthly wage payments requires the existence of a current
semi-monthly appointment and the completion of semi-monthly
on-line time input and approval.
Adjustments to prior weekly
pays must be submitted on a "Request for Additional Pay"
(RAP).
Payment to an existing University employee
for one-time services performed outside the employee's home
department requires a "Request for Additional Pay"
(RAP).
Under no circumstances should any payment
for which services are required, take the form of a direct purchase or
payment to a vendor on behalf of the recipient.
Questions regarding an individual's status
as an employee should be directed to the Office of Human Resources at
Skytop, at X4042.
Questions regarding payments to
employees should be directed to the Payroll
Service Center
at Skytop, at X4042 or e-mail payroll@syr.edu
For information on student employment,
which may differ from the above guidelines, contact the Student
Employment Office at X2268 or e-mail seo@syr.edu
2b. PAYMENTS TO INDEPENDENT
CONTRACTORS
If the University has control only of the
result of the services, and not over how, when, where, or under what
conditions the work is performed, the individual is an independent
contractor. Fees and honoraria are lump sum payments for professional
services rendered by non-employees of the University for a short-term
period, as well as payments to bonafide consulting firms for services
rendered fall into the category of payments to independent contractors.
Payments to independent contractors are made through Disbursements
Processing.
U.S. Citizens and Permanent Residents
U.S. Citizens and Permanent Residents must
submit a Form W-9 which provides their Social Security Number and a
permanent home address in order to receive a payment from Syracuse
University as an Independent Contractor.
Payments to U.S. Citizens and Permanent
Residents for services as an Independent Contractor are taxable income,
but there is no tax withholding required. The University is,
however, required to report payments of $600.00 or more
made to non-employees for services on Form 1099 Misc. to the recipient
and to the IRS. Payments totaling less
than $600.00, although taxable income to the recipient, are not required
to be reported.
Nonresident Aliens
To be paid as an Independent Contractor, a
Nonresident Alien must be present in the United States on a Visa that
permits the individual to receive such payments. The Slutzker Center
for International Services should be consulted to verify visa type and
eligibility prior to arranging for services/payments of this nature. In
addition, it is preferred that the individual have a Social Security
Number or an Individual Taxpayer Identification Number for tax reporting
purposes.
Generally, payments to a Nonresident Alien
for services as an Independent Contractor are taxable income, subject to
withholding at 30%, and reportable to the recipient and to the IRS
on Form 1042-S. However, individual's without a Social Security Number or
an Individual Taxpayer Identification Number are
subject to withholding at 31%. *Payments for services performed outside
the United States are not taxable or reportable.
The existence of a Tax treaty between the
individual's country of residence and the U.S. with a provision for
payments for independent personal services may result in an exception to
the withholding requirement, if the individual meets the terms of the treaty.
These terms may pertain to length of stay in the U.S. and/or the amount
of the payment.
Prior to paying a Nonresident alien as an
Independent Contractor, departments should contact the Comptroller's
Office at X2161 to determine the individual's tax status as well as to
learn about requirements or obtain forms that are necessary to initiate
payment.
Processing Requirements
Payments to individuals for services
as an Independent Contractor are made on a "Request for Payment
of Professional Services Rendered by Non-Employees" (Consultant
Form). In addition, for payments against Sponsored Projects or Cost
Sharing contact the Office of Sponsored Programs at X2807.
Bonafide
consulting firms should be paid against an invoice issued by the
consulting firm.
Questions regarding an individual's status
as an independent contractor should be directed to the Office of Human
Resources at Skytop, at X4042.
Questions regarding payments to
independent contractors should be directed to Disbursements Processing at
Skytop, at X2484 or e-mail disburse@syr.edu.
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