Student Award Payments

Student awards should be paid with Endowment funds. The award request should be sent directly to Endowment using a Check Request for Student Award or Prize form unless the student is a nonresident alien.

For additional information about paying awards, refer to section 5.8 in Endowment's Fund Administration & Use Handbook on KUEA’s Website (www.kuendowment.org) for further information.

If a student is a nonresident alien, the payment is processed on a voucher through Central Accounting Services. Award payments to nonresident alien students need to use account 129500 and fund 725. An Awards toNonresident Aliens form is used. All awards to nonresident aliens will have taxes withheld.

For nonresident aliens who are employees, awards must go through Payroll. If it is truly an award without a service component, Payroll needs to be aware that FICA will not be paid. Departments may need assistance to understand what constitutes an award with or without a service component.

For example, if there is an award for a GRA who achieves a certain GPA, that may constitute a service component. If, however, an award is provided to someone who achieves a certain GPA and they just happen to be a GRA, then a service component may not exist.

Departments should maintain clear and concise documentation as to why an award was given. The IRS often looks for individuals who received both a 1099 and W-2 as reasons for further investigation in an audit. Without adequate documentation, there could be penalties.