Student Prize/Award
There are generally two types of prizes or awards paid by the University to a student.
- Prizes that are considered a scholarship or fellowship - this type of prize is an amount paid to aid a student's study, training, or research. This payment should not represent payment for services.
- Prizes that are not considered a scholarship or fellowship - this type of prize would involve a payment as an award or recognition for a special achievement such as winning a judged competition. The recipient of this type of prize can use the money for any purpose.
Prizes NOT Considered a Scholarship or Fellowship
Prize/Award that involve a payment in the nature of an award or recognition for some sort of special achievement, special skill, special knowledge, or special renown in a certain area, or can represent an award won in a contest of some sort. (Examples of prizes would be a prize paid for winning a piano competition, a prize paid to a figure of world renown for outstanding achievements in a certain area of research or politics, or a prize paid for winning some sort of contest.)
When paying a Prize/Award , the grantor does not specifically intend that the grantee spend the prize amount "for the purpose of aiding study, training, or research", but instead intends the prize to be an award which recognizes the achievement or renown of the grantee and which may be spent in any fashion the grantee sees fit.
If the Prize/Award paid to a nonresident, they will be subject to a federal withholding tax rate up to 30%. The prize or award will be reported on Form 1042-S at year-end. A 1099-MISC will be sent for all U.S tax residents that are paid a total of $600.00 or more on a given tax year.
How does someone initiate a student prize or award?
Who does someone contact with questions about prizes or awards?