What is a stipend?
The term “stipend” is often used in the university setting, particularly when dealing with grant funds. The word “stipend” literally means “payment” but may be used in varying contexts. To correctly classify and process these payments, departments should follow the steps below.
The department needs to determine WHY is the individual receiving the payment?
Is the student participating as a learner or trainee in an educational or research experience?
- The primary purpose is to benefit the recipient through increased learning, knowledge or experience in the given topic area. The payment is intended to help defray living or travel expenses while participating in the program.
- Examples: undergraduate students participating in a research experience (such as NSF REU)
Payment is treated as a fellowship for tax reporting purposes and should be processed per the below.
- All scholarships funded by FSU Foundation funds are processed through the FS4U System and Financial Aid is notified when the Foundation approves the awards. The funds are then transferred to Student Business Services for disbursement.
- All scholarships not processed through FS4U or that are funded by university departments are processed through Financial Aid and disbursed through Student Business Services using the Departmental Student Payments form.
Is the student providing a service in connection with an educational or research experience?
- The primary purpose is to pay for services rendered which benefit the University or its programs. The payment is intended to compensate the individual for his/her hours worked, expertise provided, work results, etc.
- Examples: conference speaker, workshop teacher, facilitator, discussion leader, instructor, teaching assistant, or research assistant
Payment is considered compensation.
- Payments are initiated by OMNI Human Resources using a Personnel Action form and disbursed by Payroll Services.
For departmental assistance:
The FSU Tax Office can assist in determining the proper classification of stipend payments. If your department plans to pay a stipend and you have questions in working through the above steps, please contact CTL-Tax@fsu.edu.
For assistance regarding the terms and conditions specific to the sponsor and/or award on C&G funded payments, please contact your assigned SRA Accounting Coordinator or FSURF Grants Analyst.
For stipend recipients:
You may find the IRS Pub. No. 970, Tax Benefits for Education helpful. The FSU Tax Office cannot give personal tax advice. For specific concerns/questions relative to your individual tax situation, you should consult your personal tax accountant or advisor.