(PARTICIPANT SUPPORT /STUDENT FINANCIAL ASSISTANCE / SCHOLARSHIPS / FELLOWSHIPS)
1. DEFINITIONS
Stipend
For the purpose of sponsored programs at The University Corporation (TUC) and ¼ªÏé·», the term "Stipend" is used to describe a payment to a ¼ªÏé·» Student or to a Non-¼ªÏé·» Student for class participation and/or general support as aid in the pursuit of their studies.
Sponsoring agencies and faculty commonly use the terms "Stipend" or Participant Support" to describe this student financial assistance. Federal and State tax regulations do not define the term 'stipend' but use the terms 'scholarship' and 'fellowship':
Scholarship
A scholarship generally is an amount paid for the benefit of a student at an educational institution to aid in the pursuit of studies. The student may be in either a graduate or an undergraduate program.
Fellowship
A fellowship grant generally is an amount paid for the benefit of an individual to aid in the pursuit of study or research.
Note: The term "stipend" is sometimes misused to describe minor payments for services. However, these payments constitute an employer relationship and are considered taxable wages.
2. CONDITIONAL STIPENDS
The amount awarded by the stipend, either in total or incrementally, is not performance-based and generally cannot be adjusted or suspended by the PI as a result of performance.
However, stipends may have accompanying terms and conditions and the stipend may be gradually adjusted or completely suspended by the PI if those terms and conditions are not met. Terms and conditions may include enrollment in a particular degree program. participation in program activities, or maintaining a minimum Grade Point Average (GPA). Any such terms and conditions will generally be stipulated in the award agreement issued by the sponsor; it is the PI's responsibility to convey such stipend terms and conditions/stipulations to the student/stipend recipient.
3. STIPENDS VS. WAGES
A stipend payment can only be used for training and educational purposes related to a sponsored program. A stipend cannot be used to pay an individual for work or services performed, or as incentive pay.
In some instances the stipend recipient may be required to attend certain classes or perform certain activities, as a condition of receiving the stipend. These can still be considered stipends and not considered services (wages), as long as the (educational) benefit of the activities lays clearly with the recipient and the paying institution does not derive any benefit from the activities.
No 'Quid Pro Quo':
Stipends cannot be paid for any services rendered. Any amount paid for a service rendered is considered a "wage" under the IRS regulations and must therefore be processed and taxed as a salary or wage. This includes payment for teaching, research or other services rendered as a condition for receiving the scholarship or tuition reduction. These payments are considered compensation even if the services are a condition of receiving the grant or are required of all candidates for the degree.
It is the responsibility of the Principal Investigator to ensure that the payment requested constitutes a true 'stipend' payment and is not a taxable fee for service.
4. PROCEDURE
Stipends are requested through the Principal Investigator or authorized signer, approved and processed by TUC's Financial Services, and reported to ¼ªÏé·» Financial Aid. This process includes reimbursements for textbooks and tuition.
a) Request Form
Payments of stipends are requested by completing the Check Request, either through OnBase or (to set up multiple and/or recurring stipend requests), attaching the required supporting documentation. If Check Request Form is completed, send the form with supporting documents to aptuc@csun.edu.
b) Required Supporting Documentation
- Attach the following supporting documentation with the Check Request:
¼ªÏé·» Students | Copy of student’s ¼ªÏé·» ID card | Proof of Enrollment at ¼ªÏé·» through one of the following:
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Tseng College of Extended Learning | Same as ¼ªÏé·» students Note: Students of the Tseng College of Extended Learning are considered regular ¼ªÏé·» students. TUC will report all stipends of Extended Learning students to the ¼ªÏé·» Financial Aid Office. Depending on the program they are enrolled in, few of the student’s financial aid may be affected by the reporting of stipends. | ||
Non-¼ªÏé·» Students | * | ||
Minors | * |
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---If Foreign National, need email and tax analysis before processing payment.--- | |||
For faster receipt of payment, set up Direct Deposit:
*New setups requiring a W9 will provide a with W9 attached.
Note: Tuition or books require the same documentation as a reimbursement/invoice payment and will require student ID for ¼ªÏé·» students because it is reported to financial aid.
Once reported, questions related to financial aid should be directed to: ¼ªÏé·» Financial Aid & Scholarship Department |
c) Approval TUC Research and Sponsored Programs
TUC's Research and Sponsored Programs department approves the payment request based on the allowability of the expenses, the timeframe of expenses within the budget period and the availability of funds in the budget.
d) Review and Processing TUC Accounting
TUC's Accounting department reviews the payment request based on the completeness and correctness of the Check Request and the supporting documentation. The department also processes the payment request and generates payments to the recipients.
e) Distribution of Stipend Checks to Recipients
In order to prevent fraud, stipend checks are generally distributed directly to the recipients. Direct Deposit set up: . If payments are not electronically deposited, stipend checks are mailed.
If explicitly requested, a check may be held at TUC's front desk for pick-up. Recipients must come to TUC, identify themselves with a government issued photo ID, and sign for the receipt of the check. In a few exceptional circumstances, Principal Investigators, or their designees, may pick up the checks at TUC office and deliver them to the recipients directly. TUC will then provide the Principal Investigator with the checks and a sign-off sheet. Before handing the check to the recipient, it is the responsibility of the Principal Investigator to verify the identity of the recipient via a government issued photo ID and have the recipient sign the sign-off sheet. The completed sign-off sheet must be returned to TUC office, Attn: TUC Accounting. The Principal Investigator assumes full responsibility that the checks are delivered to the recipients of the stipends.
g) Reporting to ¼ªÏé·» Financial Aid
On a monthly basis, TUC Accounting department will report stipend payments made to ¼ªÏé·» Students to the ¼ªÏé·» Financial Aid department. ¼ªÏé·» Financial Aid will then determine if the stipend payments will impact students financial aid.
Financial aid questions should be directed to: ¼ªÏé·» Financial Aid & Scholarship Department |
h) Reporting to IRS
TUC will report any stipend payments made to Non-¼ªÏé·» students as taxable income on form 1099-MISC.
i) Stipends to Non-Resident Aliens
Depending on their country of origin, their visa type, and their length of stay, non-resident aliens may be subject to tax withholding and tax reporting. Prior to any payments, all non-resident aliens must provide an email and complete a tax assessment at TUC via a third-party vendor to determine their tax status. TUC may report a form 1042S to the IRS for these payments.
5. TAXATION
The material contained herein is for informational purposes only and does not constitute as a tax advice. Stipend recipients should consult with their own tax advisor or attorney with regard to their personal tax situation.
Responsibility to Determine Taxability
It is the recipient's responsibility to determine whether a stipend in whole or in part must be included as gross income under the Internal Revenue Service (IRS) Code section 117. TUC will, but is legally not responsible to report any scholarship, fellowship, grant or stipend on Form 1099-MISC.
Taxability
A scholarship, fellowship, or stipend, in all or part may be taxable, even if the recipient did not receive a W-2 or 1099-MISC form.
Generally, the entire amount is taxable if the recipient is not a candidate for a degree.
- Qualified Educational Expenses
- If the recipient is a candidate for a degree, he/she generally can exclude from income that part of the stipend used for:
- tuition
- fees required for enrollment
- books, supplies and equipment required for courses
- other expenses required for enrollment or attendance
- Non-Qualified Expenses
- The recipient cannot exclude from income any part of the stipend not required by the institution and used for other purposes, such as:
- housing
- meals
- living allowances
- non-required supplies (computers, etc.)
- travel
- clerical assistance
Services vs. Stipends
Exemptions from income does not apply to any amount which represents payment for teaching, research or other services rendered as a condition for receiving the scholarship or tuition reduction. Any payment for services are considered compensation and are not excludable from gross income under Section 117.
This rule applies even if the services are a condition of receiving the scholarship or are required of all candidates for the degree.
In some instances the stipend recipient may be required to attend certain classes or perform certain activities, as a condition of receiving the stipend. These are not considered services, as long as the (educational) benefit of the activities lays clearly with the recipient and the paying institution does not derive any benefit from the activities.
Reporting to IRS
TUC will report any non-exempt stipends to you as taxable wage on Form W-2 (if you are an employee of the Corporation) or on form 1099-MISC (if you are not an employee of the Corporation).
Taxation of Non-Resident Aliens
The above requirements and exclusion pertain equally to U.S. citizens, resident aliens and non-resident aliens. However, the tax reporting requirements for non-resident aliens may be different. The unqualified portion is subject to withholding and reporting for nonresident aliens (unless a tax treaty benefit is available). Any direct payments for stipends to non-resident aliens are subject to withholding and reporting.
Stipends to Non-¼ªÏé·» Students
Stipends to non-¼ªÏé·» students will be reported on IRS form 1099-MISC.
Stipends to Minors
Stipends to minors will be reported on IRS form 1099-MISC.
Questions / Tax Advice
If you have any questions regarding the taxable portion, you will need to consult with a tax professional, as TUC cannot extend tax advice.
Further Tax Information
For additional information please refer to .
Questions related to financial aid or taxes/tax forms should be directed to: ¼ªÏé·» Financial Aid & Scholarship Department |