| Awards to Employees and Students |
| |
| Employee Awards |
| |
| Employment-related
awards |
| Employee awards
that are based on employment criteria are wages
subject to all applicable withholding taxes. Examples
would be departmental awards to the best teacher
or best advisor in the department. These awards
should be submitted on a requisition, which will
then be routed to the Payroll Department. |
| |
| Length-of-service
awards |
| www.irs.gov/formspubs/page/0,,id%3D79377,00.html |
| |
| Student Awards |
| |
| Employment-related
awards |
| Student-employee
awards that are based on employment criteria are
wages subject to all applicable withholding taxes.
An example would be an award to a graduate assistant
for excellence in teaching. These awards should
be submitted on a requisition, which will then be
routed to the Payroll Department. |
| |
| Scholastic
achievement awards |
| Awards given
to students for scholastic achievement are taxable
income to the student, but are not subject to tax
withholding procedures, except for awards to nonresident
aliens. An example would be an award for the best
paper in a class. These awards should be submitted
on a requisition and will be paid through the Accounts
Payable Department, with income tax reporting on
Form 1099-MISC. |
| |
| Scholastic achievement
awards paid to nonresident alien students are generally
subject to 30% federal income tax withholding. Such
awards should be submitted on a requisition at least
two weeks in advance of the date the award is to
be presented. As soon as the award decision is made,
the department should direct the student to the
Payroll Department to complete the paperwork necessary
to receive the award. |
