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Policy Contact: Accounts Payable Office

1. Purpose

   The purpose of this policy is to provide guidance for the distribution of research subject and incentive payments using University funds to ensure the University is in compliance with IRS and other legal regulations.

2. Policy
    
   1. Payments to subjects in research studies must have a clear University business purpose and will be recorded as a form of compensation. Payment may be any type of remuneration including, but not limited to, checks, cash, gift cards, or any other items of value.
       
   2. Approval for research subject and incentive payments must be in accordance with approved human subjects research protocols.
       
   3. Research subject payments must be purchased from allowable funds. Allowable funds include grants where the budget allows for specific study participant compensation, student general activity fees that include research study or incentive payments in their approved budget, or other funds provided by an outside party.
       
   4. All payments are subject to applicable tax laws. If compensation exceeds $600 total for the calendar year, the subject will receive a IRS Form 1099-MISC.
       
   5. Any incentive payments to subjects who are University employees (including student workers) must be reported to the IRS as W-2 wages, regardless of the amount paid. These payments are subject to income tax and other withholdings as applicable.
       
   6. Reimbursements for travel or other costs are not considered compensation and are not covered under this policy.
       
3. Procedures
    
   1. When processing a payment to the recipient or a purchase of gift cards to be given as the incentive:
      1. The reason for providing the research subject or incentive payment must be well documented. The explanation must be included either on the attached documentation or in Document Text on the Direct Pay document in Banner. A description of what is being purchased if not apparent from the invoice should also be included, as well as the name of the intended recipient(s) and reason for the purchase.
      2. The department will collect appropriate documentation to verify the intended recipient received the item. For example, a record showing the payment, the date received, the participant’s name, and the signature of the recipient whenever possible.
      3. The documentation listing the payment recipients must be attached to the Direct Pay document in Banner after all information is gathered. The document can be paid prior to this step.
      4. The payment will be made through Accounts Payable using account code 74680 and 19500 for the commodity code on the Direct Pay document.

4. Responsible Administrator

   The Vice President for Finance and Budget, or designee, is responsible for the annual and ad hoc review of this policy. The University President is responsible for approval of this policy.

Approved by President on 11/02/2015. Revised 08/05/2024 (clerical).

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