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University Finance and Administration

Miscellaneous Payments  

Learn how prizes/awards, scholarships/fellowships/grants, and honoraria, among other types of incomes, are taxed. 

Type of Income

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

    For a U.S. Citizen, Resident Alien, and Resident Alien for U.S. tax purposes: 
    • Reported to the IRS on the 1099-Misc, Miscellaneous Income form (use Natural Account 69455). 

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

    For a Nonresident Alien for tax purposes: 
    • Note that tax is withheld at 30 percent without regard to a tax treaty (use Natural Account 69456). 
    • A non-U.S. person must be registered in the Glacier Tax Compliance Program
    • Reported to the IRS on the 1042-S form.  
  • 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. 
    • Involves the grantor’s specification of how the money is to be spent (to defray costs of study, training, or research). 
    For a U.S. Citizen, Resident Alien, and Resident Alien for U.S. tax purposes: 
    • Not reportable to the IRS. See Scholarship and Fellowship Accounts in Chart of Accounts.    

    For a Nonresident Alien for tax purposes: 
    • Reported to the IRS on Form 1042-S.  
    • If eligible for a tax treaty benefit: 0 percent tax withheld 
    • If not eligible for a tax treaty benefit: 
      • And individual is present in the U.S. under an F-1 or J-1 visa status: 14 percent tax is withheld 
      • All other visa status: 30 percent tax withheld 
    • A non-U.S. person must be registered in the Glacier Tax Compliance Program.  
  • Participants are the recipients of the training envisioned by the grant or contract. Principal investigators, researchers, various assistants, trainers, or others needed to direct, assist, and carry out the project/training are not participants. 

    For a U.S. Citizen, Resident Alien, and Resident for tax purposes: 
    • Direct payments to participants. 
    • Use natural account 61520, Participant Support (stipends). 
    • Reported to the IRS on the 1099-Misc, Miscellaneous Income form. 
    For a Nonresident Alien for tax purposes: 

    For any participant support including travel, tuition and fees, housing, etc. given to a nonresident alien: 

    • Use natural account 61560, Participant Support–NRA. 
    • If eligible for a tax treaty benefit: 0 percent 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: 14 percent tax withheld 
      • All other visa status: 30 percent tax withheld 
      • Reported to the IRS on the 1042-S Form
    • A non-U.S. person must be registered in the Glacier Tax Compliance Program
  • Pertains to the specialized services provided to Rutgers by non-university individuals such as consultants. These individuals may be U.S. citizens or resident aliens, and for tax purposes, are either considered 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 Alien for U.S. tax purposes: 
    • Use natural account 55080 Professional Services, Consultant. 

    • Must provide SSN to Rutgers University before receiving payment. 

    • Reported to the IRS on the 1099-NEC, Non-Employee Compensation form. 

    For a Nonresident Alien for tax purposes: 
    • Use natural account 55230, Professional Services–NRA. 

    • If eligible for a tax treaty benefit: 0 percent tax withheld 

    • If not eligible for a tax treaty benefit: 30 percent tax withheld. 

    • A non-U.S. person must be in the Glacier Tax Compliance Program.

    • If service provided by a nonresident alien is performed outside the U.S., there is no tax consequence. 

    • Use natural account 55240. 

    • A non-U.S. person performing service abroad (not coming to the U.S.) should not be in the Glacier Tax Compliance Program

  • An honorarium is a payment that functions as a token of appreciation to an individual for participation in a special—and typically nonrecurring—activity at a university event for which payment is not required. This method of payment is usually made as a “thank you.” 

    Normally, an honorarium is given in conjunction with an academic activity. No honorariums should be paid to a university employee. 

    For a U.S. Citizen, Resident Alien, and Resident Alien for U.S. tax purposes: 
    • Use Natural Account 54130, Services Honoraria. 

    • Must provide SSN to Rutgers University before receiving payment. 

    • Reported to the IRS on the Form 1099-NEC Non-Employee Compensation form.

    For a Nonresident Alien for tax purposes: 
    • Use Natural Account 54140, Services Honoraria NRA. 

    • If eligible for a tax treaty benefit: 0 percent tax withheld. 

    • If not eligible for a tax treaty benefit: 30 percent tax withheld. 

    • If service provided by a nonresident alien is performed outside the U.S., there is no tax consequence. 

    • Use Natural Account 54150, Services Honoraria NRA Working Abroad.