Payments to Students
When considering a payment to students, it is important to first determine the most appropriate path: assistantship, scholarship or fellowship.
Assistantship
Undergraduate and graduate research or teaching assistantships are compensated appointments to students who perform research or teaching services, or assist others in the performance of these services, that is relevant to the students’ academic goals.
Compensation may include salary, tuition remission or both. Salary is paid through standard payroll procedures, and tuition remission is paid from account code 6210 for graduates or 6211 for undergraduates. Do not use an "FA" program code for assistantship waivers. Information on assistantships is available through the .
Scholarship
Scholarships are payments granted to students toward the pursuit of an academic degree program based on merit, need, talent or other criterion.
The account code to use for this type of payment is 6105 and must include an org with an "FA" program code. Scholarship payments are processed by the Office of the Bursar using their Student Account Payment Request dynamic form.
Fellowship
Fellowships are one-time (non-recurring) research awards of a non-employment nature that typically provide both funding and facilities. Fellowship recipients may or may not be a ÃÛÌÒÓ°Ïñ student.
If the recipient is a current UA student, use account code 6221 and an org with an "FA" program code. If the recipient is not a current UA student, use account code 3014 (participant support) but do not use an org with an "FA" program code.
We utilize the regulations for student employment to determine if account code 6221 is appropriate, focusing on the following:
- Recipient must be enrolled in the university system with a minimum of six credit hours
in the current semester of awarded fellowship
or - Recipient has been enrolled the preceding semester for six or more credit hours or demonstrates plans to enroll for six or more credit hours in the next semester for an awarded fellowship between semesters
Fellowships and scholarships differ from assistantships in that the only requirement for payment, if any, is that the individual enrolls per program requirements, makes satisfactory progress and/or completes the program. The key consideration is whether the university retained the right to control the details of performance or instead gave up that right. These payments also differ from tuition and fee waivers in that we leave the payment’s specific use to the discretion of the award recipient.
In situations where a student employee may warrant a one-time tuition waiver, consider covering that specific expense as a direct payment on the student’s account through the Office of the Bursar.
Submit the following documents to the AP team at OFA after you enter a DP01-type general encumbrance in Banner:
- Employment vs. Scholarship/Fellowship Questionnaire (PDF)
- Fellowship Payment Request Form (PDF)
- Fellowship Award Letter (to the recipient) and Acceptance Letter (from the recipient) - Example Letter (PDF)
The award letter must include verbiage stating the purpose of the fellowship, amount of the fellowship, beginning/ending dates and payment schedule (weekly, biweekly, monthly, etc.). The award letter should also include information regarding taxes.
The IRS requires UA to collect information from all non-U.S. citizens and non-permanent resident aliens to determine the appropriate rate of tax withholding and reporting for any payments that we may make to such individuals. An online system called GLACIER Online Tax Compliance System makes this determination through input the recipient provides.
If the recipient is in one of these categories, OFA will contact them via email with directions to enroll in the online system. Payments will not begin until enrollment is complete.
What scholarship or fellowship payments are we talking about?
There are two methods for paying scholarships and fellowships that are not payroll-related:
- Post the award directly on the student's account (scholarship)
- Pay the award as a check or series of checks issued through AP (fellowship)
Is a 1099-MISC form ever issued for wages earned?
No. This does not include the student receiving a payroll check for providing a service to the university. All UA employees, including student employees, have their income reported to the IRS on a W-2 form each calendar year.
Is a 1099-MISC form ever issued to report scholarship or fellowship income?
Are the rules different if the student is a nonresident alien for tax purposes?
Is a student still required to report this income on their tax return?
Yes. The short answer for those students who are US citizens, permanent residents or resident aliens for tax purposes is that they should report the income from their scholarships and fellowships on their individual tax return, even though they do not receive a 1099-MISC form.
We recommend that the student work with a tax preparer, as some forms of scholarships (such as tuition waivers) are not taxable nor are they reportable, and there may be tax credits available to the student taxpayer.
Nonresident aliens for tax purposes receive the 1042-S and use that information to help report their scholarship or fellowship income on their tax returns.
Our staff are happy to answer questions and help navigate the fellowship process.