Tax Reminders for the New Year
Gifts, Prizes
and Awards
All cash or gift certificates are taxable from $1.00 whereas
any tangible property purchased as a gift, prize or award
is non-taxable up to $90.00 but should be reported. Gifts,
prizes or awards exceeding $90.00 must be reported as taxable
including the recipient's name and social security number.
Expense
Reimbursements or Accounting for Advances
Expense reimbursements or repayments
of advances reported more than 60 days after the expenses
or advance is incurred will be taxable to the individual.
Using per diem instead of actual expenses may reduce your
record keeping, if appropriate.
Payments
to Nonresident Aliens
If you are inviting someone from another country (student,
faculty or staff member), and either payment for services
or even just expense reimbursement is involved, please be
aware that much of the paperwork must be gathered or completed
while they are here. Given this, let the Tax or Payroll
Departments know of their visit or projected expenses ahead
of time. Lack of preparation prior to a visit could result
in unnecessary tax withholding or even an inability by the
university to pay.
Reimbursements
to Employees Who Have Paid Individuals
Faculty or staff members should not make payments
to students or other individuals out of their own pocket
for services rendered. An IPS (Individual Payment for Services)
form should be filed whenever possible. In order to initiate
this process please supply the Business Office with a signed
memo including the person's name, social security number,
address, payment amount, and services rendered. This is
particularly important when paying students because issues
concerning Financial Aid, nonresident aliens, the NCAA or
IRS could arise.
Charitable
Contributions
When requesting that a university contribution be made,
forward all information to the Tax Department. Contributions
exceeding $500 should be approved by John Sejdinaj (Vice
President for Finance) on the Request
for Charitable Contribution form.
As contributions made to the university are received or
acknowledged, use the Gift
Routing Form.
Charitable
Contribution in Lieu of Compensation
An individual may contribute a due compensation to the
university in lieu of payment for services. This decision
must be decided upon and documented prior to the services
being rendered. A lack of control over the disposition of
the gift by the donor is important. Use the Charitable
Contribution in Lieu of Compensation Form.
Scholarship
/ Fellowship Payments
When making an award please notify the student (the Tax
Department can provide a recommended letter). The type of
payment received will determine the necessary taxability
and reportability. If an award is to be used for "qualified
expenses" such as tuition, books or mandatory course
fees, then the award is non-taxable and non-reportable.
If an award is to be used for "non-qualified items"
such as room and board or travel grants, then the award
is taxable but still non-reportable.
Sales Tax
Exemption and Collection
The university may or may not be eligible for sales tax
exemption on purchases (see
list by state). Sales tax exemption is dependant on
the state in which a purchase is made and the item purchased.
The Business Office can provide exemption certificates prior
to a purchase being made.
There is typically no exemption on anything that the university
sells. Collect and report sales tax for all sales in-state.
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