TSS - What is an Honorarium Payment and How Does One Get Paid?

What is an Honorarium Payment and How Does One Get Paid?

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First Published  :Fri Nov 21 17:24:58 GMT 2014
Last Modified  :Thu Sep 21 19:26:45 GMT 2017
Last Published  :Thu Sep 21 19:26:45 GMT 2017
Summary :  Definition of honorarium and process to have a payment made.

Response

Primary Information

    An honorarium is a token payment made to bestow recognition to an individual for services they perform, for which payment is not required.  Typically, an honorarium is issued when custom or propriety forbids a price to be set.  Therefore, payment to the recipient is at the discretion of the payer.  The arrangement between the recipient and the university is informal and does not require a contract.  Because payment is not required, honorarium recipients do not provide an invoice to the university.

    A check voucher form should be completed for honorarium payments.   Once completed, send to TSS for processing (TSS does not complete the form on behalf of the department).  Please note that a W9 (for US Citizens or Resident Aliens) or W8 (for non-resident aliens) tax form will be needed, as well as some type of supporting documentation, such as a letter of invitation, letter of acceptance, or an announcement/advertisement of the event.   If the recipient of the honorarium has incurred travel expenses, receipts may accompany the check voucher, or be submitted at a later time on a paper travel form.  Please note that the travel expenses are not taxable on the 1099 they will receive unless reimbursement for travel is not supported by actual receipts.  The IRS rules state that undocumented travel expenses will indeed be taxed.


    Honorariums are considered taxable income by the IRS. Tufts does not withhold taxes to US Citizens and Resident Aliens.  As a general rule, payments made to non-resident aliens (NRA) through A/P for honorarium are subject to a 30% withholding unless the tax rate is reduced or eliminated by the presence of a tax treaty. A NRA should be obtain an Individual Tax Identification Number (ITIN) for payment purposes (complete IRS W-7).  Without that number, a treaty benefit can not be claimed. See Also What is an ITIN?
     NRAs must also complete the Alien Payment Form. 
    The Visa Waiver Program (VWP) allows citizens of participating countries to travel to the United States without a visa for stays of 90 days or less, when they meet certain requirements.  Travelers must be eligible to use the VWP and have a valid Electronic System for Travel Authorization (ESTA) approval prior to travel.  Individuals present under the VWP are eligible to receive honorarium payments.  They are treated as if they have a B1 Visa and therefore, must complete the same requirements (Alien Payment and B1 form).  Please click the link below for more information.
    http://travel.state.gov/content/visas/english/visit/visa-waiver-program.html


    As long as the travel expenses are supported by receipts, it is not included on the 1099.  Travel not supported by actual receipts is included on the 1099.  The IRS does this so the consultant cannot “double dip” and claim the expenses on their personal return too. Payment time varies, dependent on several variables.  Once completed documents are received, Accounts Payable will process within 3-5 business days.  Check runs occur on Tuesday evenings.  For more specific information about the payment date, please refer to PO Inquiry.

    Please note that honorariums are paid for non-Tufts employees only.  If one department wishes to pay an individual from another department, this must be done via supplemental pay through Payroll.



     

Related Information

    Check Voucher Forms can be obtained by contacting TSS.

    W-7 to obtain an ITIN, see also What is an ITIN?

    W-8 BEN

    W-9

Information

Keywords

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