Peer Review and Research Board and Committee Member Payments

Definition and General Information

Peer review is defined as an evaluation of scientific, academic, or professional work by others working in the same field. This includes evaluations of degree programs, reviews of scholarly work, and other similar activity conducted by an authority or expert in the field of endeavor.

A research board or committee member payment is defined as a payment to an individual (not a corporation, business, or partnership) who is not a current or recent employee of the University for personal advisory services while acting in a board or committee member capacity. This includes Community Advisory Boards, Scientific Advisory Boards, Committee Members, and other similar activities such as consulting, advising, reviewing, or sharing opinions on a project or grant, where the individual is considered an expert in the field and the services are conducted as a board or committee member.

As both services rely on the expertise of others and are closely aligned, they have been grouped together to ease processing concerns.

For both, the payment may be agreed upon and an invoice or other request for payment may be received. The authorization for payment is not dependent upon either of these facts. Furthermore, the individual may receive recurring payments for continued service. However, payments for more than nominal amounts or for services performed over an extended period of time (greater than two years) should be reviewed by Tax Administration to ensure continued proper worker classification.  

This payment process is specific to peer review and research board and committee member payments. If a payment does not meet the criteria set within this information or other ePRF criteria, processing as a requisition, with Procurement Services review and approval through SpearMart is required.

Information Required to Process Payments

Peer review and research board and committee member payments should not be processed as an honorarium payment. As such, a new procedure has been developed to process the large volume of these unique services. As payments for peer review and research board and committee services are a common practice in higher education, the payment process has been set apart from those independent contractors requiring a Purchase Order. Therefore, payments to peer reviewers and research board and committee members may be paid unencumbered with an electronic Payment Request Form (ePRF).

Both peer review and research board or committee member payment recipients must first be set up as a supplier in OMNI to receive payment. In order to facilitate this, the new Substitute Form W-9 and Vendor Authentication Process has been developed. The form, along with a job aid detailing its use, can be found on the Controller’s Forms website under Accounts Payable > Vendor Authentication Form.

If the recipient is a nonresident alien, the new Substitute Form W-9 and Vendor Authentication Process should not be completed. Instead, the department should contact Payroll Services directly.

If the payment is on a project or grant, it must be allowable per FSU and grant guidelines. Additionally, if the payment is less than $1,000 and on a project or grant, the ePRF must be manually routed to Sponsored Research Accounting for approval.

Once the new Substitute Form W-9 and Vendor Authentication Process is submitted and prior to the supplier ID being created in OMNI, the department should complete the Independent Contractor Checklist for submission to Tax Administration for review. Upon approval, Tax Administration will notify Disbursement Services to complete the OMNI supplier setup process. Once the new supplier ID has been created in OMNI, the department should complete the Peer Review and Research Board and Committee Member Certification form. When completing the electronic payment request in OMNI, attach the completed Certification form. Incomplete certification forms will cause the payment request to be denied.

Taxation, Reporting, Policy, and Travel Expenses

The IRS classifies personal services into two categories: those performed by employees and independent contractors. As such, peer review and research board and committee member payments are considered taxable compensation to the recipient regardless of the amount. Per IRS regulations, the payment is reportable by the University and Form 1099-NEC will be issued to U.S. Citizens and Resident Aliens receiving payments totaling $600.00 or more per calendar year. As this payment is classified under independent contractor status, FSU does not withhold taxes to US Citizens and Resident Aliens. As a general rule, payments made to non-resident aliens (NRA) for personal services are subject to a 30% withholding unless the tax rate is reduced or eliminated by the presence of a tax treaty. Peer review and research board and committee member payments to NRA individuals are reported on Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding.

Independent contractor status allows travel and lodging reimbursement under our accountable plan as provided in Treasury Regulation 1.132-1(b)(2). Therefore, travel and expense reimbursements processed by the Travel Office are paid under IRS accountable plan rules and are not considered taxable compensation to recipients. Furthermore, peer reviewers and research board and committee members who are unpaid volunteers may still receive travel and lodging reimbursement and be included in the University’s accountable plan rules and treatment. However, if a department combines an amount intended to reimburse travel and lodging with a peer review or research board or committee member payment, the individual should be informed that the entire payment would be reported as taxable compensation.

IRS Regulation 31.3121(d)-1(c)(2) provides that an employee relationship exists when the person for whom services are performed has the right to control and direct the individual who performs the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. Being paid to perform advising, consulting, and review type services brings the possibility of further control and direction. For that reason, the University has created a special process to review and approve these payments combining both the tax review from the Procurement process and the ePRF payment process to ensure proper worker classification.

Procurement Services Policy 4-OP-A-6 defines an independent contractor as a person or firm who provides a service to FSU but does not have an employment or other relationship or connection with FSU as prescribed in Florida Statute 112.313. IRS Regulation 31.3402(e)-1 suggests that an individual should not receive both wages and independent contractor compensation during the same period of time from the same employer.  For purposes of administering the Florida Statute, IRS Regulation, and FSU Policy prohibition, the University uses 12 months as a measure of this period of time.  This means that an individual will not be approved as a supplier if the individual was previously employed by the University within the last 12 months. Exceptions to this rule must be approved by Tax Administration who will evaluate all of the facts and circumstances.