I. General Comments
The purpose of these guidelines is to clarify the procedures surrounding the use, limitations, and payment of honoraria to U.S. citizens and foreigners. It will also explain reporting requirements associated with the location where the services were performed. UCAR staff who engage in activities described below, in support of UCAR activities, will be deemed to be doing so in furtherance of their job responsibilities and will receive no special compensation. UCAR staff who engage in activities described below, in support of a sponsor's activities, may be paid directly by the sponsor. UCAR cannot pay an honorarium to a Federal Employee and does not pay honoraria to UCAR employees.
An honorarium is an amount of money paid to an individual (not a UCAR or Federal Employee) for services performed. This is a one-time payment for services, including, but not limited to, visitor lecturers, instructors, editing and other contributions to publications, speakers, translators, foreigners assisting with foreign meeting plans, etc.
B. U.S. Citizen:
An individual who is a U.S. citizen has U.S. Citizenship, a domestic home address and a U.S. social security number.
An individual is a foreigner if they are not a U.S. citizen. These individuals may be in this country on one of several types of visas and may or may not have a U.S. social security number.
D. Location of Services:
The location of services determines the report ability and taxability of the monies paid for services to foreigners. For U.S. citizens, the amount is always reportable and taxable if it exceeds the IRS minimum of, currently, $600 U.S. dollars per year.
E. Limitation of Amounts:
UCAR has no limitation on an amount paid to an individual as an honorarium. The appropriate UCAR Lab/Div/Prog approvals and budget restraints are the only limitations.
III. Procedure for Requesting Payment of an Honorarium
A. UCAR employees cannot receive honoraria and UCAR cannot pay honorariums to Federal Employees..
B. Honoraria Paid to a U.S. Citizen for Services Performed within the U.S.
If the individual is a visitor and on a UCAR travel authorization, the honorarium may be encumbered and requested as part of the travel voucher. If UCAR is not supporting the travel, a Request for Check/Wire/Draft form may be used. The UCAR Budget and Finance office must have the individual's home address and U.S. social security number prior to the honorarium check being issued.
If the total amount(s), per individual, is in excess of $600 U.S. dollars per calendar year, UCAR will issue the individual a 1099 (miscellaneous income report) at the end of the calendar year in which the honorarium is paid.
C. Honoraria Paid to U.S. Citizen for Services Performed Outside the U.S.
This procedure is the same as stated in "III. B." above.
D. Honoraria paid to a Foreigner for Services Performed within the U.S.
If the person is a foreign visitor and on a UCAR travel authorization, the honorarium may be encumbered and requested as part of the travel voucher. If UCAR is not supporting the travel, a Request for Check/Wire/Draft form may be used. The UCAR Budget and Finance office must have the individual's foreign home address and foreign identification or passport number prior to the honorarium check being issued.
If the visitor's country of residence has a tax treaty with the U.S., the honorarium may be exempted from tax; therefore, the visitor must provide UCAR Travel with a completed Form 8233 (Exemption From Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual) prior to the honorarium check being issued or UCAR must withhold the mandatory 30% for taxes as stated in I.R.S. publication 515 which can be located via the web http:/www.irs.ustreas.gov/prod/forms_pubs/pubs.html. Form 8233 can be found at http:/www.irs.ustreas.gov/prod/forms_pubs/forms.html and current information on tax treaties can viewed in the Finance Office.
The foreigner will be issued a 1042S (equivalent to a U.S. 1099) at the end of the calendar year in which the honorarium is paid, indicating the amount of withholding. The foreigner may then, if applicable, file for a refund from the IRS.
If the foreigner provides UCAR with a completed Form 8233, they will also receive a 1042S at the end of the calendar year in which the honorarium is paid. There is no need for the foreigner to file for a refund with the IRS since no taxes were withheld.
E. Honoraria Paid to a Foreigner for Services Performed Outside the U.S.
If a foreigner provides services for UCAR outside the U.S. and is paid an honorarium, no reporting or tax requirements exist.
UCAR Honoraria/Stipend Form
Please contact the Shelley Richards-Craig, ext. 8857.