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  :Fri Feb 23 19:11:28 GMT 2018
Last Published  :Fri Feb 23 19:11:28 GMT 2018
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.

    The following items need to be completed in order for an honorarium to be paid

    US Citizen and Resident Aliens
     - Completed Check Voucher
     - W9
     - Supporting documentation, such as letter of invitation, letter of acceptance or an announcement/advertisement of event.

    Non Resident Alien
     - Completed Check Voucher
     - W8BEN
     - Alien Payment Form
     - Supporting documentation, such as letter of invitation, letter of acceptance or an announcement/advertisement of event.
     - W7 if you are applying for ITIN.

    Check vouchers should be sent to TSS for processing.  Note:  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.  The IRS rules state that undocumented travel expenses will indeed be taxed but travel with receipts are not taxed. 
    The IRS does this so the consultant cannot “double dip” and claim the expenses on their personal return too.

    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?

    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


    Payment time varies, dependent on several variables.  Once completed documents are received, Accounts Payable will process within 5-7 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.


    If a payment must be international, a wire payment form can be used.
     

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

    Alien Payment Form

    W-9


    Wire Payment Form

Information

Keywords

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