What You Should Know
Salaries, wages, fellowship stipends to graduate students, and payments for work performed by students generally are taxable and are processed through payroll.
Non-payroll payments to students include:
- scholarship and fellowship amounts;
- prizes won in a competition and awards recognizing accomplishments; and
- reimbursements for business expenses and travel incurred on the University’s behalf.
Non-Payroll Payments to Students
SAFE should be used for funding for Senior Thesis Research, Study Abroad, Internships, Independent Work, Special Projects, and Group Activities.
A Note About Taxes
Reimbursements that are submitted within 60 days of being incurred normally are not taxable; reimbursements submitted more than 60 days after being incurred may be approved with additional review, and may be subject to tax to comply with IRS guidelines.
Other non-payroll payments are subject to tax reporting, but the amount of tax the student will pay, if any, varies based on the nature of the payment and the tax status of the individual student. In general, the taxability has to do with whether or not the payment is considered qualified or non-qualified and the citizenship and resident status of the student.
Types of Non-Payroll, Non-Travel Payments
All non-payroll payments to students must comply with our Business Expense Policy. Please refer to this policy to determine what constitutes an appropriate prize, award, or gift.
Awards & Prizes
Awards and prizes are given to students in recognition of performance and achievement, usually based on established criteria. There is no restriction on the use of awards and prizes. For example, a student could use an award to buy a television.
For awards of tangible property, you’ll need to send a memo to payroll naming the recipient, stating the value of the award, and request reporting of imputed income.
A scholarship refers to an amount paid to or on behalf of an undergraduate student in pursuit of studies. In addition to any financial aid a student receives, your department may wish to provide scholarship funding for a variety of purposes. Payments for materials and supplies for scholarly purposes, money to help the student with living expenses, and money for study abroad all are considered scholarships.
Fellowships are payments made to graduate students to aid in the pursuit of studies. Graduate student fellowships paid out monthly through payroll are called fellowship stipends. Departments can make additional fellowship payments to a graduate student for many purposes including: equipment and supplies for research; language training; and living expenses.