106 Check Distribution Policy

Accounting Services will only release checks to the payee or a certified check custodian. Any person requesting a check must present a valid photo ID at the time of pick up. To request a check for pick up by a custodian, a signed Check Custody Agreement must be submitted with the payment request.

Date: May 1, 2018


Check Pick Up: As of 5/1/2018, Accounting Services will only release checks to the payee or a certified check custodian. Any person requesting a check must present a valid photo ID at the time of pick up. To request a check for pick up by a custodian, a signed Check Custody Agreement must be submitted with the payment request.

Check Custodians and the Check Custody Agreement: Staff may become a check custodian for a check or set of checks by submitting a signed Check Custody Agreement. An agreement or copy of the agreement must be submitted with each payment request (DP, PIR, Invoice, and Payment Upload). This handling exception requires written justification explaining the business reason(s) for doing so in addition to the authorizing signature of the Divisional CFO. Check custodians are personally responsible for check security and safekeeping until the check is distributed to the payee. A check custodian alternate may also be named.

Check Distribution Log: Each custodian is provided with a Check Distribution Log with their checks. The checks are counted to confirm all checks were received at the department and signed off on the log. As checks are distributed, the payee should sign the log and the custodian or alternate should write their name and the date distributed. Checks that are mailed should have “mailed” written in the payee signature field. Check Distribution Logs must be returned to Accounting Services within 30 days of the check date.

Check Intermediary Form: In the event a check custodian must hand off a check to an intermediary custodian for delivery to a payee, a Check Intermediary Form must be completed by the check custodian, intermediary custodian, and signed by the payee for each check. Check Intermediary Forms are returned to Accounting Services with the Check Distribution Log.

Check Custodian Audit: There will be an annual audit of check custodians to review proper timeframe from check pick up date to cashed, authorized chain of custody of the check, proper secure storage, documentation of checks given out, internal controls and violation of agreement and fraud. A sample of 5 checks will be reviewed as well as department check handling procedures.


Contacts:

For tax questions contact Accounting Services.

102 Exceptional Expenditures Using 133/144 Funds Policy

Research and Sponsored Programs (RSP), in partnership with Accounting Services, have issued the following policy for all division/departments to follow when they have 133/144 funded grants that may include language that permits exceptional expenditures that are not covered by State/University policies or exceed costs allowed within State/University policies.

Policy: 102-Exceptional Expenditures Using 133/144 Funds
Date:
08/11/03 (Updated June 21, 2013)


Statement of Policy:

Research and Sponsored Programs (RSP), in partnership with Accounting Services, have issued the following policy for all division/departments to follow when they have 133/144 funded grants that may include language that permits exceptional expenditures that are not covered by State/University policies or exceed costs allowed within State/University policies.

If you have a grant that may permit costs that are not covered by State/University policy and you believe that the expenditure should be paid through the University, please contact the appropriate RSP Team Leader to discuss the particular circumstances of the transaction prior to making the commitment. RSP will review the terms and conditions of the grant and, if covered, will issue a prior approval memo or email that can be used to pay for the expenditure through normal UW processing. If you are seeking a blanket approval for a series of transactions, please note that in your request to the appropriate RSP team leader.

The approval memo or email should be attached to the requisition, invoice, travel expense report, employee reimbursement, payment to individual report or purchasing card log for each transaction.

This process takes the place of the former UW System cost waiver agreement form. The UW System cost waiver agreement form is no longer available because it’s not required when following the appropriate UW Madison Purchasing/Accounting policies.

Although these exceptions rarely occur, following this process should prevent delays in future transaction processing.


Related Procedure(s):

 


Who should know this policy?

Deans, Directors, and Staff dealing with expenditures using 133/144 funds


Related Documents:


Contacts:

E-mail uwtravel@bussvc.wisc.edu with questions.

101 Payments to Individuals

The Payment to Individual Report (PIR) is used to request all payments to individual non-employees. In the process of fulfilling their mission to instruct, conduct research, and perform public service, departments within the University of Wisconsin-Madison may find it necessary to pay individuals who are not employed by the university

Policy/Procedure: 101-Payments to Individuals
Date: 06/09/2010 (Last updated: 04/13/2015)


Statement of Policy

The Payment to Individual Report (PIR) is used to request all payments to individual non-employees. In the process of fulfilling their mission to instruct, conduct research, and perform public service, departments within the University of Wisconsin-Madison may find it necessary to pay individuals who are not employed by the university. An individual is defined as “a person who is not a company, partnership, corporation, association, organization, trust or estate, and for whom an employer-employee relationship does not exist.” See UW System Administrative Policy SYS 235: Personal Services Payment for more details. This policy includes paying individual non-employees for goods and services, prizes and awards, fellowships, and scholarships. Travel and expenses are reimbursed separately using e‑Reimbursement

UW-Madison Accounting Services will comply with the rules set forth by the UW-System, Board of Regents and federal government concerning non-salary payments as established in the following documents:

Procedure

I. General Guidelines

The Payment to Individual Report (PIR) is used to request all payments to individuals except salaries, employee reimbursements, and payment to subcontractors and architects. An individual is defined as “a person who is not a company, partnership, corporation, association, organization, trust or estate, and for whom an employer-employee relationship does not exist.” See UW System Administrative Policy SYS 235: Personal Services Payment for more details.

Examples of valid payments processed with a PIR:

  • Direct-charge payments to individuals for services, prizes and awards, scholarships, rents, royalties, and participant support.
  • You may use the PIR to pay a non UW employee for services.
  • You may use the PIR to pay a fee that is less than $100 to a registered UW student.
  • If you are processing scholarship payments to U.S. Residents on Program 9, please review the Automated Departmental Scholarship procedures. Contact your Dean’s Office for further information on this process as each Dean’s Office has a representative in charge of submitting scholarship payments to U.S. Residents on Program 9 using the Automated Departmental Scholarship procedures mentioned above.
  • All payments to an Individual, Sole Proprietorship, Partnership, or Limited Liability Companies (LLC) as described in the 1099-MISC/1042S Tax Reportable Transactions by Account Codes.

Notes:

  1. Fee for services payments over $100.00 to students or any payment to a UW employee must be pay rolled.
  2. Lists are not allowed to be submitted with a PIR effective 02-19-2010.
  3. For non-employees who file for reimbursement of travel costs, please follow the guidelines outlined in Policy 203-Payment for Services and Travel and Expense Reimbursement for Non-employees.
  4. If a transaction is over $5,000, a requisition is required unless the department has delegated authority to do Entertainment Contracts; see Purchasing Policy and Procedure, Entertainers/Speakers/Instructors and Consultant Contacts.
  5. See UW System Financial Policy and Procedure Paper #36 for further instructions.
  6. Contact John Dreger at 333 E Campus Mall #9701 for instructions regarding the processing of student loans.

Account Codes

  • Code payments for services to SFS Account Code 2620.
  • If the coding for payment is using Program 9, the Dean/Director’s Office must send the PIR to the Student Financial Aids Office for approval.
    • Program 9 can only be used with SFS Account Codes 5711 and 5713.
  • Provide the individual’s home mailing address when using the following SFS Account Codes on the PIR: 2620, 2621, 3750, 3860, 2637, 5709, 5710, and 5711.
  • SFS Account Code 2637 (Reportable) should conform to our procedures for paying human subjects.
  • 1099-MISC/1042S Tax Reportable Transactions by Account Codes are posted online.

II. Definitions of Payments That Can be Made Using a PIR

A. Scholarships/Fellowships

Student assistants are enrolled University of Wisconsin graduate students, and, on occasion, undergraduate students, who are appointed and paid directly through department channels. Payments for assistantship stipends must be pay rolled. Payments to undergraduates are generally reported on the grid form and those to graduate students are reported on a PIR. The titles authorized for student assistants are Research Assistant, Program/Project Assistant, Teaching Assistant, and Undergraduate Assistant. Additional student appointments, which also must be pay rolled., are Fellow, Scholar, Trainee, Advanced Opportunity Fellow, Special Graduate Trainee and House fellow/Resident Assistant.

Although payments for assistantship stipends must be sent through payroll, other payments to support research of research assistants or student appointments should be requested on the Payment to Individual Report. An example of this type of payment is a travel award to a research assistant.

Lump sum payments for scholarships/fellowships which are not related to student assistant-ships are generally requested through the Payment to Individual Report using the appropriate student aid class codes. Examples are athletic scholarships, participant payments, and departmental scholarships. For scholarship payments to U.S. Persons it is highly encouraged that the Scholarship Process be used and by contacting your Dean’s Office. However, effective 01/01/2015 all scholarship payments (whether for graduate or undergraduate students) to Nonresident Aliens (NRA) must be processed through Payroll due to the immigration documentation and taxation requirements.

B. Prizes and Awards

Cash prizes and awards which are in any way related to a person’s employment with the University MUST be paid through the payroll system as a lump sum payment. An example of this type of payment is an award to a faculty member for excellence in teaching. The payment will be subject to tax and social security withholding and will be reported on the employe’s W2 form.

Cash prizes and awards are considered taxable income and are reported to federal and state tax authorities. In contrast, scholarships and fellowships are taxable only to the extent they exceed tuition, books, and course-related supplies and equipment. Scholarships and fellowships to U.S. residents are not reported to federal and state tax authorities. It is very important that scholarships and fellowships be reported on the appropriate scholarship/fellowship account code. Scholarships and fellowships recorded on a prizes/awards class code will receive incorrect tax treatment. If you are unsure if a payment qualifies as an award or a scholarship, the determining factor should be whether the student has unrestricted access to the funds. It is most likely a scholarship if the recipient must be currently registered or registered in the future at an educational institution in order to receive the payment. It is most likely an award if the recipient is entitled to receive payment regardless of student status.

C. Services (Refer to account Codes 26xx for Specific Account Codes)

D. Research Subject Payments (Account Code 2637)

E. Royalties (Account Code 3860)

F. Rents (Refer to Account Codes 23xx for Specific Account Codes)

III. Instructions for Completing the Payment To Individual Report Form

Vendor # Each vendor or individual will be added to our SFS Accounting System Vendor File and be assigned a vendor number. For Accounting Services use only, leave blank.
Voucher # Each payment made in the SFS Accounting System will be assigned a voucher number. For Accounting Services use only, leave blank.
Payee name The full, legal name of the payee (last name, first name, middle initial).
Amount Enter the total amount to be paid to the individual before any applicable tax withholding.
Funding Information Enter the specific funding information to which the payment is to be charged. This includes Account, Fund, DeptID, Program, Class (Bldg #), Budget Year, and Project.
Taxpayer ID# (SSN, EIN, ITIN) The Social Security Number (SSN), Employer Identification Number (EIN), or Individual Taxpayer Identification Number (ITIN).

Enter the individual’s social security number or individual taxpayer identification number (ITIN), if any. This is the tax identification number under which any reportable payments will be reported to tax authorities. Accuracy is extremely important. Taxes must be withheld from reportable payments if a social security number or ITIN is not provided.

An individual who is a nonresident alien and does not have a social security number or ITIN, should apply for a social security number, if eligible, or for an ITIN, if not eligible for a social security number. After application has been made, enter “applied for” in this space, and see Accounting Services Policy and Procedure Manual on Tax Reporting and Withholding on Non-Salary Payments.

Invoice # Leading characters PIR plus the date of service, complete as PIRMMDDYY. Where there is an attached invoice, PIR plus the invoice number should be used.
Payment Handling Code Determines how the check will be routed. For Accounting Services use only, leave blank.
Mail To Address Enter the address to which the check should be mailed or special handling instructions (i.e., call for pickup, campus mail, etc.).

  • If the check is to be picked up, enter “please call (name) at (x-xxxx) when check is ready.
Permanent Home Address Enter the individual’s permanent mailing address if different from the “Mail Check To” address. This is the address to which a tax form will be mailed at the end of the calendar year.
If State Employee indicate Agency/Dept If paying an employee from another state agency or department, please agency and/or department.
Currently Enrolled UW Student Is the payee a student currently enrolled at a UW Institution? Check yes or no.
Residency If the payee is a legal United States resident or a resident of another country, check appropriate box. If resident of another country please enter the country name and VISA type in the space provided.

1099-MISC/1042S Tax Reportable Payment Select Yes, No, or Not Sure.

Please use the 1099-MISC/1042S Tax Reportable Transactions document to determine whether a transaction you are processing needs to be reported to the payee for tax purposes. All transactions listed in the column labeled “1099-MISC/1042S REPORTABLE TRANSACTIONS INCLUDED IN THIS CODE” must be marked/checked as reportable on the processing form you are submitting (PIR, etc.).

If you are not sure please check the appropriate box on the form and Accounting Services will make the determination. Accuracy is a must in order to be in compliance with Internal Revenue Service (IRS) reporting requirements.

Date(s) of Service Enter the exact dates during which service was/will be provided.
Purpose of Payment Describe the purpose of payment.

  • Use e-Reimbursement for travel and expense reimbursements as outlined in
For more information, call Indicate the name and phone number of a person to contact if there are questions regarding the payment request.

Add additional contact information from the Dean’s Office to be contacted instead of the individual listed on the DP/PIR form. Add the contact’s name and phone number directly under the departmental contact person. (Hint: Use “Alt + Enter” when adding the additional information in the field. Using only the “Enter” key will result in moving to the next cell or field in the form.)

Accounts Payable will only contact the person indicated from the Dean’s Office as responsible for supplying additional information; not both. If Accounts Payable receives a form without an additional Dean’s Office contact name, the contact person indicated on the form will be the only one contacted.

Business Office Use Only Where taxes are calculated. For Accounting Services use only, leave blank.
Entertainer/Public Speaker Section Complete this section if the payee is an entertainer or public speaker.

  • Attach a completed, signed entertainment contract.
    • Only UW Purchasing can sign contracts for the University unless the Department has been delegated by Purchasing to sign contracts.
  • Payment may be subject to withholding if the entertainer or public speaker is not a Wisconsin resident.
    • If the payee is an entertainer or public speaker and is a non Wisconsin-resident then a completed Department of Revenue (DOR) Form WT-11 must be attached to the PIR.
  • See Accounting Services Policy and Procedure Manual on Tax Reporting and Withholding on Non-Salary Payments for complete instructions regarding the Wisconsin Entertainer Tax.
Federal Tax Calculation For Accounting Services use only, leave blank
Scholarship/Fellowship Section If the payment is for a scholarship or fellowship to a UW student, separately enter the portions of this payment which apply to Semester 1, Semester 2, and Summer Session. Enter the award date (date the student was notified of the award.)
Approving Signatures And Dates Before payments can be processed all signatures and dates must be on the PIR (Department Chairperson/Project Director, Dean/Director, Student Financial Aids if expense is charged to Activity 9, and Authorized Institutional Approval (Pre-Audit)).

  • If the payment is for a scholarship/fellowship on activity 9, the form will be forwarded by the Dean’s office to the Office of Student Financial Aids.
Submitting the form: Print and submit one copy of the form to Accounting Services, Suite 5301, 21 N. Park Street..

Photocopy original receipts that are not 8 ½ by 11 and attach the photocopy to the PIR instead of the original.

  • The Department keeps the original receipt as a back up for 90 days and then destroys it.
Forms Help Red triangles in various fields of the form contain comments designed to help you complete the form. Also, some form text is hyper linked to web information that will assist you in completing the form.

Questions regarding this form should be e-mailed to uwtravel@bussvc.wisc.edu.

Printing Your Form There are many versions of Excel on campus. The forms have been developed to print on one page. If you are having problems printing, use the Excel tool bar, select File, then Page Set Up. This will open a dialog box for you to select “Fit to 1 page”. If this solution does not work, please contact your IT support person for further assistance.

IV. Policies for Compliance

Certification of Compliance

UW System Administrative Policy SYS 235: Personal Services Payment requires a certification of compliance on all requests for payment. Your signature on the PIR or requisition is a certification that you have read UW System Administrative Policy SYS 235: Personal Services Payment and the transaction is in compliance with the policy.

Exception to FPPP #31

Section III of UW System Administrative Policy SYS 235: Personal Services Payment states “When an institution determines an employment relationship exists, the individual must be appointed and paid on payroll unless the exception under ‘Employment Procedures’ is met. The exception listed under ‘Employment Procedures’ includes payments of less than $500 for a series of definitely predicted events to persons other than current UW System employes, full-time state employes, or students attending UW System institutions.”

Part-time state employes are not covered by the exception under “Employment Procedures”. In making the determination whether the individual is considered a student attending a UW System institution for the purposes of this exception, a student who is eligible for student employment falls into this category. Contact Academic Personnel for current guidelines regarding eligibility for student employment.

The term “a series of definitely predicted events” is to be taken literally. The $500 payment limit applies to any series of definitely predicted events, regardless of time period or source of funding.

UW-Madison has requested and received approval to make one additional exception to the policy. If the individual performing the service is a non-U.S. resident and the work is performed outside the United States, the individual may be paid as an independent contractor, regardless of whether an employment relationship exists.

Academic Support Services Policies

Chapter 36 of the Wisconsin Statutes gives the Board of Regents the authority to enter into contracts in order to fulfill the instruction, research, and public service missions of the University. Contracts entered into under this authority do not need to follow the state purchasing statutes found in Chapter 16 of the Wisconsin Statutes. UW System Administrative Policy SYS 235: Personal Services Payment permits the use of Chapter 36 authority to obtain unique services directly in support of instruction, research, or public service (referred to as Academic Support Services), without obtaining bids or waiver of bid authority.

Before deciding if a service qualifies as an Academic Support Service, it is necessary to ascertain that the person performing the service should not be pay rolled. If it is not a payroll transaction, Purchasing Services will make the final determination as to whether a service may be considered an Academic Support Service.

The requisition process must be used for all academic support service requests. A PIR cannot be used for such transactions.

UW System Administrative Policy SYS 235: Personal Services Payment requires signed agreements for academic support services if the cost is $5,000 or more (excluding itemized travel). Agreements may be written at the department’s option for services costing less than $5,000. Purchasing Services will generate the agreement and send it to the vendor for signature. For more information on the format of such agreements, contact Purchasing Services.

Regardless of dollar amount, Academic Support Services Agreements must be signed by an authorized contracting officer for the institution. This generally is the Director of Purchasing Services. You do not have authority to sign such agreements.

Related Information

UW-Madison

UW System


Related Policy/Procedure

 


Who should know this policy?

Deans, Directors, and Staff who prepare payments.


Contacts

E-mail at uwtravel@bussvc.wisc.edu.

103 Payments to Research Participants

103 Payments to Research Participants

Date: July 1, 2013

PURPOSE

The purpose of this policy and the following procedures is to outline the payment mechanisms that can be used to make payments to human subjects participating in research studies and to determine when gathering of research participant tax information is required.

POLICY

The University of Wisconsin (UW) often conducts research projects that involve the use of research participants.  The propriety of any payment to a research participant in a human subject research protocol will be determined by the UW’s Institutional Review Boards (IRB’s), and the related protocol must be approved or determined to be exempt by the appropriate IRB before the study is conducted.  Payment methods may include checks or cash depending on specifics of individual studies and the dollar amounts to be paid.

UW-Madison staff members have been trained to handle protected health information confidentially in accordance with the 2003 Health Insurance Portability and Accountability Act (HIPAA).  Applicable regulations will be followed based on the facts and circumstance of each study.

Payments to research participants must be reported every calendar year in accordance with the Internal Revenue Code (IRC) to the individual in Box 3 of the Internal Revenue Service (IRS) form 1099-MISC (Miscellaneous Income).  Information required includes the research participant’s name, mailing address, and Taxpayer Identification Number (TIN) which can be their Social Security Number (SSN) or their Individual Taxpayer Identification Number (ITIN).  Annually, at the end of the calendar year in which a payment is made, Accounting Services will report payments received by research participants to the IRS as required by the IRC and a form 1099-MISC (Miscellaneous Income) will be sent to the research participant.

De minimis Research Participant Payments:

  • Effective July 1, 2013, individual payment amounts of under $250 ($249 or less) are considered by UW Madison to be de minimis in nature.
  • For de minimis payments of under $250, departments are encouraged; but not required, to obtain a Taxpayer Identification Number (TIN) from the research participant, to the extent that collection of this information is consistent with the confidentiality protections provided to the research participant accepted by the reviewing IRB.
  • If the research coordinator is aware that the research participant will be getting multiple de minimis payments of under $250 that will cause the recipient to exceed the IRS limit of $600, then it is the researcher’s responsibility to obtain the required taxpayer identification information and a W-9 from the recipient.
  • De minimis payments of under $250 only applies to research participant payments and does not apply to other payments made by the University. For payments other than research participant payments there is no de minimis payment of $250 limit and a TIN and W-9 are to be obtained from the recipient.
  • De minimis payments of under $250 do not apply to Nonresident Aliens (NRA) under any circumstances. See Eligible Research Participants section of this policy below.
  • A researcher may request an exception to this policy from the Assistant Vice Chancellor for Business Services, which if approved, would allow the researcher to pay a research participant an amount greater that the de minimis payment amount without collecting TIN’s for individual research studies. Exceptions will be granted, on a case-by-case basis, based on the facts and circumstances of the individual study.

Eligible Research Participants (Who does this Policy and Payment Procedure apply to?)

  • US. Persons (Citizens, Permanent Residents-Both Employees and Non-Employees) – This policy and payment procedure, applies to all U.S. Persons (Citizens, U.S. Resident Aliens).  UW employees are treated the same as non-UW employees when participating as research participants.  Per the IRS, research participant payments are not considered wages and therefore, payments to UW employees are not required to be processed through the Human Resource System (HRS) (Payroll).
  • Nonresident Alien (NRA) – This policy and payment procedure applies to NRA’s, but the payment method for NRA is restricted to only Payment to Individual Report (PIR) due to the immigration and taxation documentation associated with payments to NRA’s as imposed by Homeland Security and the Internal Revenue Service (IRS). Please see below for restrictions relating to NRA’s:
  1. All payments to NRA’s must be processed through a Payment to Individual Report (PIR) regardless of the dollar amount. Please follow the Payment to Individual Report (PIR) procedures, attaching all required documentation as outlined in the Non-Payroll Payments Flowchart.
  2. The de minimis payment of under $250 section of this policy does not apply to NRA’s.

PAYMENT PROCEDURES

Payments to research participants are to be processed using the methods listed below only.  Employees will not be reimbursed if research participant payments to study participants are paid using a Purchasing Card (P-Card), University Personal Liability Credit Card, Personal Credit Card, or personal funds.

Payment Mechanisms

  • Payments of under $250 ($249 or less) (de minimis payment amount)

Custodian Funds and Payment to Individual Report (PIR) may be used to make de minimis payments of under $250.  To the extent consistent with the confidentiality protections provided to the research participant in the approved protocol departments are encouraged; but not required, to obtain a TIN from the research participant when de minimis payments are made.  Obtaining TIN’s from the research participants must be consistent with approved confidentiality as per IRB approved study protocols.

  1. Custodian Funds

The Custodian (Principal Investigator) can make payments directly to research participant via check, cash, or gift cards.  Follow the Custodian Funds Policy for all payments from replenishable or temporary custodian funds.  The Custodian is personally responsible for determining the amount of the advance and complying with Taxation and Identification Requirements.

Research Participant Recipient Log must be completed for all payments.  A copy of the log must be attached to the Custodian Fund Accounting Form to account for the distribution of custodian funds.  The completed log must contain the following information for each participating recipient:

  • Amount Paid to Each Recipient
  • Name or Recipient Identifier
  • Date Received by Recipient
  • Check number or Gift Card Identifier
  • Signature or Initials of Each Recipient
  1. Payment to Individual Report (PIR)

Payments of any amount can be processed on a Payment to Individual Report (PIR).  A check is issued directly to the research participant.  Follow the Policy and Procedure: 101-Payments to Individuals and the Tax Compliance and Reporting for Research Participant Payments section below.

  • Payments of $250 or more

All payments of $250 or more must be processed on a Payment to Individual Report (PIR).  A check is issued directly to the research participant.  Follow the Policy and Procedure: 101-Payments to Individuals and the Tax Compliance and Reporting for Research Participant Payments section below.

 

Tax Compliance and Reporting for Research Participant Payments

Under the Internal Revenue Code (IRC), payments to research participants must be reported every calendar year to the individual in Box 3 of the Internal Revenue Service (IRS) form 1099-MISC (Miscellaneous Income).  The information required for research participant payments include the research participant’s name, mailing address, and Taxpayer Identification Number (TIN) which can be their Social Security Number (SSN) or their Individual Taxpayer Identification Number (ITIN).  Accounting Services will report payments received by research participants to the IRS as required by the IRC, and a form 1099-MISC (Miscellaneous Income) will be sent to the research participant at the end of each calendar year in which a payment is made.

Per the Internal Revenue Service regulations, information on participants in research studies must be obtained for tax reporting purposes.  Researchers and Dean/Director’s or their designees are responsible for monitoring the dollar amounts and frequency of research participant payments to ensure tax compliance.

Effective July 1, 2013, individual payment amounts of $249 or less are considered by UW Madison to be de minimis in nature.  For de minimis payments, departments are encouraged, but not required, to obtain a Taxpayer Identification Number (TIN) from the research participant.  De minimis only applies to research participant payments and does not apply to other payments made by the UW.  For payments other than research participant payments made by the University no de minimis amounts apply.

The informed consent and any applicable HIPAA documents required for use in a research study do not need to describe the collection of information from research participants when that information is solely used to process study payment.  Instead study teams are recommended to have research subjects complete a form, which should be maintained separately from research records, to obtain relevant information that also alerts the participant that the payment will be reported by the UW to the IRS.

EXCEPTION PROCESS

Exceptions to the de minimis section of this policy may be granted based on the facts and circumstances of the research participant study.  The Assistant Vice Chancellor for Business Services is responsible for granting exceptions subsequent to receiving the following information for the particular research participant study under consideration:

  • The researcher must demonstrate, in writing, that the collection of Taxpayer Identification Numbers (TIN)’s will jeopardize research by negatively impacting the research participant pool. This must include an explanation why disclosure of information will inhibit the project from obtaining representative samples of research participants.  Confirmable and verifiable data and evidence should be provided as part of the request for exception.
  • Provide written justification that there is a low probability that the participant will receive $600 or more in payments from the UW as a whole in a given calendar year.
  • Identify the steps the researcher will implement at the research project level in order to ensure compliance with #2 above. For example:
  • Develop a form where parties acknowledge that they are not receiving total payments from the UW in excess of the Internal Revenue Service (IRS) $600 reporting limit. The narrative would include “The research participant understands that receipt of total payments of $600 would require the UW to provide notification to the IRS.”  Total payments include, but are not limited to, payments from all UW Campuses for research participant payments, rents, services (including parts and materials), prizes and awards, and other income payments.

Exception Request Submission:

  • Upon presentation of written request for exception to the Assistant Vice Chancellor for Business Services, a review will be conducted by the Division of Business Services based on the facts and circumstances, and a written acceptance or denial of the exception request for will be issued. The Assistant Vice Chancellor for Business Services will provide the final approval or denial for exceptions to this policy.
  • Exceptions will be granted for only the specific study submitted. Future studies, no matter how related or similar in nature, will require separate request for an exception to be approved by the Assistant Vice Chancellor for Business Services.

For more information contact our Tax Manager Jose Carus Jr.