![]() Payments to Research Subjects must be made following the policies and procedures found on Policy 103-Payments to Human Subjects If the payment classification is not accurate, all remaining tax and reporting determinations will be incorrect. If at any time you are unsure of the payment classification, you should contact the UW Tax Compliance Office. The main area typically reviewed for misclassification are employee versus independent contractor. For example: “Stipend” is just a word that means a payment but what the person does to receive the stipend or payment defines the payment classification.Īccurate payment classification is very important as misclassification of payments can lead to payor risk for penalties as well as potential disallowance of funding for programs. Payment classification is based on the activity and relationship the individual has with the payor in order to receive the payment, NOT what a payment is called. Services (Employee or Independent Contractor).The payor recognizes the following payment classifications: Payments where no services are rendered.Payments in which the individual provides “services” OR.There are two groups of payment classifications: The main tax reportable payments at the University of Wisconsin are services, medical services (including corporations), legal settlements, rents, royalties, human subjects, prizes and awards, scholarships/fellowships) ![]() You can reference IRS publications IRS Publication 15-B “Employer’s Tax Guide to Fringe Benefits” and the IRS FSLG Fringe Benefit Guide for more information. Most regulations on excludible rules are tied to service worker payments (employee or independent contractor payments). “Reported” means the paying entity is required to and will provide a tax statement at calendar year-end to the payment recipient and also send the data to the government. They could also be the value of benefits provided in which the recipient gains personal use such as personal use of a company vehicle. Reportable items can include, but are not limited to, lump sum payments, gift cards, gift certificates, living allowances, etc. Generally, all payments to, or on behalf of, the individual are taxable and reportable unless there is an Internal Revenue Service (IRS) rule that exempts the payment from taxation or excludes the payment from taxable reportable income. Reportable payments are tied to the relationship the individual has with the paying entity as detailed below in the section on payment classification. Reportable payments are payments to or on behalf of an individual that must be “reported” to the government as income received. Posting to the Student Information System (SIS). ![]()
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