Processing Student Employee Recognition Award Payments
John P. Kruczek, University Controller
The purpose of this memorandum is to provide procedures for processing award payments to student employees. Awards to student employees generally fall into two categories, employment and non-employment recognition. An example of an employment related award is recognition of graduate assistants for excellence in teaching. Non-employment student awards are made for scholastic achievements, where eligibility is not contingent on past, present or future services performed for the University of Florida.
The following are processing instructions for various award types.
- Employment Related Awards
Employment related student awards may be processed via the Payroll system and authorized via the On Line Payroll Certification system. These payments should be paid as lump sum payments. The payments will be processed with the employee’s regular wage payment and are subject to applicable taxes based on the employee’s classification. Many of these student awards will not be subject to Social Security and Medicare if the student recipient meets the criteria for primary classification as a student and the personnel appointment is processed with the correct earnings code. Please contact your departmental personnel representative to determine the correct earnings code for each individual. The Bureau of State Payrolls does not offer a method to process this type of award for a pre-specified amount such as a net $100.00 for OPS employees at the supplemental 28% rate. Additionally the lump sum payment will be paid with the employee’s regular wage payment through Direct Deposit if the employee is enrolled for this convenience.Employment Related Awards When A Check Is Required For Presentation
Employment related student awards may be processed through the Payroll Services office with a process that will ensure that a check is issued for presentation at an awards ceremony. Although this method allows you to receive a check, it does not allow for receipt of a check in a prespecified net amount. The request should be submitted on a Payment Authorization, (Form 305/4-29-94) with appropriate approvals. Documentation supporting the award payment must be included with the request. To obtain a check, the Payment Authorization and documentation must be received in the Payroll Services office ten business days prior to the last day of the month. The check should be available to the department eight business days after the beginning of the month.
Employment Related Awards To Non Resident Aliens
Employment related awards to students who are non resident aliens should be processed utilizing the procedures above. Students and scholars on F and J visas are not subject to Social Security and Medicare taxes.
Scholastic Achievement Awards
Awards to student employees for academic achievements may be made through University Disbursement Services on a Payment Authorization (FACT 305/4-29-94). These payments are not related to employment and are not subject to payroll taxes but are taxable income. Should the amount exceed $600.00, a Form 1099-Misc, Miscellaneous Income, will be issued to the recipient for tax purposes after the following December 31. These should be clearly identified as an academic achievement award and be processed using object code 498011, Student Achievement Awards. If the recipient is a U.S. citizen or resident alien, these payments may also be made directly through the University of Florida Foundation. Payments to non-resident aliens are subject to special tax reporting and withholding requirements and may not be made directly through the Foundation.
Scholastic Achievement Awards To Nonresident Aliens
All non-employment award payments to nonresident aliens are subject to 30% federal income tax withholding. Unlike wage payments, which may allow treaty exemption from federal income tax withholding depending on the student’s country of residency, award payments are not afforded any exemption. Non-employment award payments to Nonresident Aliens may be made via University Disbursement Services on a Payment Authorization. In addition to the Payment Authorization copies of the visa, Departure Record (I-94) and tax identification number (TIN), a social security number (SSN) or an individual tax identification number (ITIN), are required. In accordance with the State Comptroller requirements a TIN is required before the payment can be made. Several weeks may be required to obtain a TIN. Taxable income to Nonresident Aliens is reported on Form 1042S, Foreign Person’s U.S. Source Income Subject to Withholding.
Please note that any payment to a student should be reported to the Student Financial Aid Office. In addition please allow sufficient lead time in cases where funds must be transferred from the Foundation to the University prior to disbursement.
If you have any questions regarding the payment of awards via Payroll Services, please contact Murphy Miller (email: firstname.lastname@example.org) at 392-1231. For questions regarding disbursements through University Disbursement Services, please contact Dorothy Dykes (email@example.com) at 392-1241. If you have questions regarding disbursement or transfer of Foundation funds please contact Ken Hillier, (email: Khillier@uff.ufl.edu) at 392-5958.