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Whether you are a professor or researcher coming to the College or Institute to give a talk/lecture/presentation or whether you are an artist performing or whether you are consultant working on a project, you are considered an independent contractor receiving self-employment income.

You can generally receive an Honorarium and reimbursements for travel expenses. Below is detailed how these payments are treated tax-wise for U.S. citizens, green card holders and resident aliens for tax purposes. For independent contractor payments to non-resident aliens go to the Foreign Nationals section.

Remember, that in order to get paid you need to provide Form W-9.

Honorarium

... is processed through the individual departments in Middlebury / the Institute and paid via check or wire;

... is NOT taxed by the College / Institute unless no social security number or individual taxpayer identification number is provided. Then 28% backup withholding is required by the IRS;

... is reported by the College / Institute on Form 1099MISC in Box 3 if total payments exceed $600;

... is reported by you on Form 1040 or 1040EZ.

Gifts in Lieu of Payment

... include, but are not limited to, occasional birthday or holiday gifts of property such as a College / Institute t-shirt, coffee mug, etc., flowers, fruit, books, etc. provided under special circumstances such as sickness or death in family; food and beverages provided at staff meetings or holiday parties; occasional tickets to athletic or entertainment events; certificate for specific merchandise from the College / Institute Bookstore (such as ball cap, t-shirt, or pen set) occasionally provided under special circumstances such as recognition of birthday, holiday, or special circumstances;

... are generally discouraged by the College / Institute. They are allowable if minimal in value and provided infrequently. Gifts for life events such as marriage, baby, death, etc. are personal expenses and are not paid by the College / Institute.

... are processed through the individual departments in Middlebury / the Institute;

... are NOT taxed by the College / Institute unless greater than de minimis ($100 for the Institute) and no social security number or individual taxpayer identification number is provided. Then 28% backup withholding is required by the IRS;

... are NOT reported by the College / Institute unless greater than de minimis ($100 for the Institute). Then payment is reported on Form 1099MISC in Box 3 if total payments exceed $600;

... are reported by you only if greater than de minimis on Form 1040 or 1040EZ.

Travel Expenses

... include, but are not limited to, visa fees, mileage, car rental, gas for car rental, toll, parking, air fare, train fare, bus fare, taxi fare, hotel, housing, utilities for housing, hospitality, meals, site visits, special events, conference registration, office supplies, postage, photocopies, printing, binding, per diem payments for meals and incidentals per GSA rate;

... are processed through the individual departments in Middlebury / the Institute and paid via check or wire for reimbursements or directly to the hotel/airline etc.;

... are NOT taxed by the College / Institute as they fall under the accountable plan rules (Treasury Regulation 1.62-2). To honor the accountable plan rules the payee has to (1) establish the business purpose and connection of the expenses; (2) substantiate the expenses (original receipts!) claimed to the payer within a reasonable period of time; and (3) return any amounts to the payer which are over and above the substantiated business expenses within a reasonable period of time;

... are NOT reported by the College / Institute on any IRS form unless payment is per diem or reimbursements are made based on copies of original receipts or amounts are over and above the substantiated business expenses, or not accounted for within a reasonable period of time and are then reportable to the IRS on Form 1099MISC;

... are NOT reported by you on Form 1040 or 1040EZ unless above exception and may then be claimed as expenses on your personal or business income tax return.

Last Updated: May 18, 2009

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