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.
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.