Shared Services Prizes and Awards

Introduction

Prizes and awards are amounts received primarily in recognition of religious, charitable, scientific, educational, artistic, literary, civic achievement, or as the result of entering a contest.  All prizes and awards (with the exception of qualified scholarships) are includible in gross income unless all of the following conditions are met:

1. The recipient was selected without any action on his or her part to enter the contest.
2. The recipient is not required to render substantial future services as a condition to receive the prize or award.
3. The prize or award is transferred by the payer to a government unit or tax-exempt charitable organization as designated by the recipient.

All three of the above conditions must be met in order to exempt the prize from taxation.

Process

Before submitting a payment request to Accounts Payable for a prize awarded to a current student, you must first determine whether the student is an international student subject to the nonresident alien tax rules and if so, whether they are eligible and have claimed treaty benefits.  If the status is unknown, the request may be forwarded to Nancy Robinson in Financial Aid to make that determination.  For questions related to eligibility of treaty benefits and the tax status of graduate students, please contact Laurie Bouchard in the Controller’s Office at 542-8494 or by email at lmbouchard@amherst.edu.

• US citizen/resident alien student - A Request for Student Payment form must be submitted to the Controller’s Office to request payment.  All applicable areas of the form must be completed in order to process the request.
• Nonresident alien student - A Request for Student Payment Form must be submitted to the Controller’s Office to request payment.   All applicable areas of the form must be completed in order to process the request. In addition, a Foreign National Information Form and a W-8BEN, if applicable, must be completed for each nonresident alien who has not previously completed one for Payroll or Financial Aid.

Federal Tax Treatment

For US citizens and resident alien students, all prizes totaling $600 or greater for the calendar year must be reported by the College to the IRS on form 1099-MISC. It is the responsibility of all prize recipients, regardless of the amount of the prize, to report the taxable prize received to the IRS on their personal income tax returns.

For nonresident alien students, the College is required to withhold 30% tax on the full amount of the prize unless treaty benefits apply. The prize amount will be reported to the IRS and to the student on form 1042-S.