Miscellaneous Payments to Individuals, Awards, Grants, Stipends, and Honoraria

The following information details definitions and procedures for taxing individuals, consultants, and personal service providers based on the type of income earned.

Type of Income

Prize/Award

An award is an amount received primarily in recognition of a special achievement. A prize is the result of entering a contest. In both cases, the grantor does not specifically state how the money should be spent.

For a U.S. Citizen, Resident Alien, and Resident for tax purposes:

  • Report to IRS on a 1099-Misc, Miscellaneous Income form

Note:  If the award is directly related to job performance, must be processed through Payroll.

For a Nonresident Alien for tax purposes:

Scholarship/Fellowship/Grant

A scholarship, fellowship, or grant is:

  • An amount given to an individual to aid in the pursuit of study, training, or research
  • Cannot be a payment for services
  • Grantor specifically intends money be spent to defray costs of study, training, or research

For a U.S. Citizen, Resident Alien, and Resident for tax purposes:

  • Not reportable to the IRS by Rutgers University

For a Nonresident Alien for tax purposes:

Participant Support-Stipends

Participants are the recipients of the particular training envisioned by the grant or contract.  PI's, researchers, various assistants, trainers or others needed to direct or assist and carry out the project or training are not participants.

For a U.S. Citizen, Resident Alien, and Resident for tax purposes:

  • Direct payments (stipends) to participants
    • Use natural account 36300, Participant Support (stipends)
    • Reported to IRS on 1099-Misc, Miscellaneous Income form

    For a Nonresident Alien for tax purposes:

    Any participant support including travel, stipend, tuition & fees, housing, etc. given to a nonresident alien

    • Use natural account 37600, Participant Support- NRA
    • If eligible for a tax treaty benefit, then 0% tax withheld
    • If not eligible for a tax treaty benefit
      • And present in the U.S. under an F-1 or J-1 visa status, then 14% tax withholding
      • All other visa status, then 30% tax withheld
      • Reported to IRS on 1042-S Form

    Consulting, Independent Personal Service

    Specialized services provided to the University by nonuniversity individuals such as consultants  or other independent personal service providers. These individuals may be US citizens or resident aliens and are for tax purposes either an individual, sole proprietor, association or other non-incorporated entity. A nonresident alien also can provide Independent Personal Service.

    For a U.S. Citizen, Resident Alien, and Resident for tax purposes:

    • Use natural account 31100 Professional Services, Consultant
    • Must provide SSN to Rutgers University before receiving payment
    • Reported to IRS on 1099-Misc, Miscellaneous Income form

    For a Nonresident Alien for tax purposes:

    • Use natural account 37200, Professional Services–NRA
    • If eligible for a tax treaty benefit, then
      • 0% tax withheld
    • If not eligible for a tax treaty benefit, then
      • 30% tax withheld
    • If service provided by a nonresident alien is performed outside the U.S. there is no tax consequence.
      • Use natural account 37800

    Educational Services /Honoraria

    An honorarium is defined as a payment for personal service on which custom or propriety forbids a price to be set.  Typically, Honoraria are for guest lectures, appearances, or other brief educational services provided to the University by outside experts who are US citizens or resident aliens. Please note that NIH does not allow Honoraria, however, it will allow charges for professional services.

    For a U.S. Citizen, Resident Alien, and Resident for tax purposes:

    • Use natural account 31200, Professional Services, Consultant
    • Must provide Social Security Number (SSN) to Rutgers University before receiving payment
    • Reported to IRS on Form 1099-Misc, Miscellaneous Income form

    For a Nonresident Alien for tax purposes:

    • Use natural account 37300, Professional Services- NRA
    • If eligible for a tax treaty benefit, then
      • 0% tax withheld
    • If not eligible for a tax treaty benefit, then
      • 30% tax withheld
    • If service provided by a nonresident alien is performed outside the U.S. there is no tax consequence.
      • Use natural account 37800

    Note:  When paying an NRA, please also refer to section Payment to Nonresident  Alien (non-employee) through Accounts Payable.