The purpose of this policy and the following procedures is to outline the payment mechanisms that can be used to make payments to human subjects participating in research studies and to determine when gathering of research participant tax information is required.
The University of Wisconsin (UW) often conducts research projects that involve the use of research participants. The propriety of any payment to a research participant in a human subject research protocol will be determined by the UW’s Institutional Review Boards (IRBs), and the related protocol must be approved or determined to be exempt by the appropriate IRB before the study is conducted. Payment methods may include checks or cash depending on the specifics of individual studies and the dollar amounts to be paid.
UW–Madison staff members have been trained to handle protected health information confidentially in accordance with the 2003 Health Insurance Portability and Accountability Act (HIPAA). Applicable regulations will be followed based on the facts and circumstances of each study.
Payments to research participants must be reported every calendar year in accordance with the Internal Revenue Code (IRC) to the individual in Box 3 of the Internal Revenue Service (IRS) form 1099-MISC (Miscellaneous Income). Information required includes the research participant’s name, mailing address, and Taxpayer Identification Number (TIN) which can be their Social Security Number (SSN) or their Individual Taxpayer Identification Number (ITIN). Annually, at the end of the calendar year in which a payment is made, Accounting Services will report payments received by research participants to the IRS as required by the IRC and a Form 1099-MISC (Miscellaneous Income) will be sent to the research participant.
U.S. Persons (Citizens, Permanent Residents-Both Employees, and Non-Employees) – This policy and payment procedure, applies to all U.S. Persons (Citizens, U.S. Resident Aliens). UW employees are treated the same as non-UW employees when participating as research participants. Per the IRS, research participant payments are not considered wages and therefore, payments to UW employees are not required to be processed through the Human Resource System (HRS) (Payroll).
Payments to research participants are to be processed using the methods listed below only. Employees will not be reimbursed if research participant payments to study participants are paid using a Purchasing Card (P-Card), University Personal Liability Credit Card, Personal Credit Card, or personal funds.
Custodian Funds and Payment to Individual Report (PIR) may be used to make de minimis payments of under $250. To the extent consistent with the confidentiality protections provided to the research participant in the approved protocol departments are encouraged; but not required, to obtain a TIN from the research participant when de minimis payments are made. Obtaining TINs from the research participants must be consistent with approved confidentiality as per IRB-approved study protocols.
The Custodian (Principal Investigator) can make payments directly to the research participant via check, cash, or gift cards. Follow the Custodian Funds Policy for all payments from replenishable or temporary custodian funds. The Custodian is personally responsible for determining the amount of the advance and complying with Taxation and Identification Requirements.
Research Participant Recipient Log must be completed for all payments. A copy of the log must be attached to the Custodian Fund Accounting Form to account for the distribution of custodian funds. The completed log must contain the following information for each participating recipient:
Payments of any amount can be processed on a Payment to Individual Report (PIR). A check is issued directly to the research participant. Follow UW-3003 Payments to Individuals and the Tax Compliance and Reporting for Research Participant Payments section below.
All payments of $250 or more must be processed on a Payment to Individual Report (PIR). A check is issued directly to the research participant. Follow UW-3003 Payments to Individuals and the Tax Compliance and Reporting for Research Participant Payments section below.
Under the Internal Revenue Code (IRC), payments to research participants must be reported every calendar year to the individual in Box 3 of the Internal Revenue Service (IRS) form 1099-MISC (Miscellaneous Income). The information required for research participant payments includes the research participant’s name, mailing address, and Taxpayer Identification Number (TIN) which can be their Social Security Number (SSN) or their Individual Taxpayer Identification Number (ITIN). Accounting Services will report payments received by research participants to the IRS as required by the IRC, and a Form 1099-MISC (Miscellaneous Income) will be sent to the research participant at the end of each calendar year in which a payment is made.
Per the Internal Revenue Service regulations, information on participants in research studies must be obtained for tax reporting purposes. Researchers and Dean/Director or their designees are responsible for monitoring the dollar amounts and frequency of research participant payments to ensure tax compliance.
Effective July 1, 2013, individual payment amounts of $249 or less are considered by UW Madison to be de minimis in nature. For de minimis payments, departments are encouraged, but not required, to obtain a Taxpayer Identification Number (TIN) from the research participant. De minimis only applies to research participant payments and does not apply to other payments made by the UW. For payments other than research participant payments made by the University no de minimis amounts apply.
The informed consent and any applicable HIPAA documents required for use in a research study do not need to describe the collection of information from research participants when that information is solely used to process study payment. Instead, study teams are recommended to have research subjects complete a form, which should be maintained separately from research records, to obtain relevant information that also alerts the participant that the payment will be reported by the UW to the IRS.
Exceptions to the de minimis section of this policy may be granted based on the facts and circumstances of the research participant study. The Assistant Vice Chancellor for Business Services is responsible for granting exceptions subsequent to receiving the following information for the particular research participant study under consideration:
For more information contact our Tax Manager Jose Carus Jr.