Compensatory Stipend Payments

Compensatory stipend payments are payments that are dependent upon the individual providing services or being employed by the University as a condition of receiving the stipend payment and would generally be considered employment wages. In this situation, the University is the primary beneficiary of any work product produced and any benefit to the individual is incidental. Students may be enrolled in a course related to the work being performed but the work performed should not be a course requirement, nor should it be mandatory for any specific course to meet graduation requirements. Any course credits received related to the work performed should be incidental with the primary beneficiary of any work product produced being the University. Additionally, the individual must be under the supervision of a WVU or related entity supervisor and have set or standard expected working hours. The set or standard working hours and the number of hours permitted to work per week must follow the University’s student employment guidelines for student worker positions.

As employment wages, compensatory stipend payments should be paid through the University’s payroll system. Employment wages are subject to income tax withholding, and the individual will receive a Form W-2 at the end of each calendar year reporting wages paid and taxes withheld. Employment wages are subject to the University fringe rate, which includes the employer portion of the Federal Insurance Contributions Act (“FICA”) taxes.

Compensatory stipend payments made to students in student employment positions, including but not limited to, Federal Work-Study student employees, departmental student employees, hourly workers, or graduate positions (GTA, GRA, GA, etc.), are considered wages. Compensatory stipend payments that are subject to grant or donor restrictions that do not permit the payment(s) to be considered employment wages nor allow for required tax-related expenses should be amended, if possible, with the granting agency or donor to allow such payments. If the payment is compensatory in nature and is therefore considered wages, applicable tax withholding and reporting are required regardless of the terms of the grant or donor restriction. It will be the responsibility of the department to cover these costs if there are grant and/or donor restrictions that cannot be amended.

Compensatory stipend payments paid through payroll will be treated in the same manner whether the individual is a U.S. Citizen, a Resident Alien (Green Card Holder), or a Non-Resident Alien.