Payment of Honoraria

An honorarium payment is a payment made as an expression of thanks or recognition to a lecturer or a person for engaging in a University sponsored activity. Typically, these are paid to parties external to the University (i.e. those who are not University employees) as an expression of thanks.

This policy outlines the circumstances in which the University can provide payment to guests who are U.S. citizens and foreign nationals, and describes the associated tax implications.

 

Reason(s) for the Policy

To govern University honoraria payments.

Primary Guidance To Which This Policy Responds

This policy primarily responds to the guidance of the IRS, which governs the taxation of payments to both US and foreign nationals

Who is Governed by This Policy

This policy governs the payment of honoraria. All University personnel who process honoraria payments or who manage employees who process these payments are governed by this policy.

Who Should Know This Policy

It is the responsibility of all University personnel who process honoraria payments to know this policy. Additionally, Accounts Payable staff who process these payments should know this policy.

 

Honoraria for US Citizens

An honorarium payment is a payment made as an expression of thanks or recognition for engaging in a University sponsored activity. Common examples are:

  • Guest lecturers, speakers or panelists participating in a campus symposium.
  • Awards to an individual for a special achievement or renown for participation in a short term activity or event that is of an educational, research, or public service nature and no-specific deliverable or specific result is requested or expected.

Honorariums are typically being paid to parties external to the University (i.e. those who are not University employees or students). Under rare circumstances a student may be eligible for an honorarium, however this exception must be approved by the VP for Procurement Services. This payment type is considered taxable income and is reportable to the Internal Revenue Service (if the sum of annual payment(s) to the person is $600 or more annually for domestic individuals and all amounts for foreign individuals) and may require withholding.

Payments Not Qualifying for Honorarium

  • No honorarium payments may be made to a current employee, permanent, part-time, full-time or temporary.
  • An honorarium may not be based on a negotiated amount between the individual providing services and the individual seeking services.
  • Any verbal or written negotiated agreement in which the university will be obligated to pay for services is a contractual arrangement and must be made in accordance with procurement regulations.
  • Honorarium payments may not be used for independent contractors or consultants.

In accordance with the Taxpayer Identification Number Form (W-9) Requirement policy, U.S. vendors doing business with the University must provide a completed and signed form W-9 to Vendor Management. 

Once the recipient’s vendor profile has been approved by Vendor Management in Procurement, follow the instructions on the Finance Office website for completing a Check Request Form. Include the payee’s name and home address. In the space labeled Description of Services, provide all available details for the honorarium payment.  The Check Request Form must be accompanied by documentation (e.g. memo, flyer) describing the event and reason for payment.

An honorarium is taxable income that is reported to the IRS on Form 1099 if the sum of annual payment(s) to the vendor is $600 or more annually. However, expenses reimbursed to an honorarium recipient are not considered taxable income.

A payment is not treated as honorarium if the payment is for specified services rendered by an independent consultant or employee. Payments to University staff or Faculty members must be processed through the Human Resources Processing Center (HRPC) as additional compensation.

Please note: Under IRS regulations, honoraria payments are considered taxable income. Therefore, as a matter of policy, the recipient of an honorarium payment may not transfer the payment to another organization or individual. If the honorarium recipient wishes to transfer the payment to another organization or individual, he or she must receive the money and then donate it. The only exception to this rule is employees of certain Federal Government Agencies.

Foreign Individuals who traveled to the United States

In accordance with the Payments to Foreign Nationals and Entities Policy, Nonresident aliens doing business with the University are required to provide a completed and signed Form W-8 or Form 8233 along with evidence of immigration status.

Departments must obtain the following from the individual depending upon the individual’s country of residence, as this will be required before the vendor is setup in the system and payment is issued:

  • Passport and one of the following:
    • Passport page reflecting Homeland Security
    • ESTA
    • Copy of I-94 Departure Card (official documentation of immigration status)
    • Visa

Depending on the type of payment, all payments made to or on behalf of a nonresident alien or foreign entity are generally subject to income tax withholding unless specifically exempted, either by U.S. tax law or an income tax treaty. Generally, payments not exempt from withholding, are subject to 30% federal income tax withholding, in accordance with Internal Revenue Service (IRS) regulations. To claim an exemption from tax withholding under an income tax treaty, the payee must submit the appropriate exemption request form.

Prior to agreeing to pay an honorarium payment to a non-resident alien, you must confirm that the individual is present in the United States under an immigration status that allows him or her to perform an activity for which a payment may be made. Foreign individual visitors (including visa exempt Canadians who enter with only a passport and who have declared their reason for visiting the U.S. is business or Mexicans with Border Crossing Cards) that meet certain criteria may receive honoraria payments, even though they are not otherwise authorized to work in the United States and are not eligible for a social security number (SSN). Prior to agreeing to pay an honorarium payment to a non-resident alien, you must also confirm that the individual is not subject to U.S, economic or trade sanctions under the Office of Foreign Assets Control (OFAC). A listing of sanction programs can be found on the OFAC website.

The four criteria that must be met for foreign individual visitors on a B-Visa are:

  • “usual academic services” (typically lectures);
  • for periods up to nine days at a time during any six month period;
  • for no more than five institutions per six month period; and
  • for higher education or nonprofit/government research institutions.

The University maintains a chart that demonstrates the type of payment that is intended to be made and the non-immigrant status, indicating whether a payment may be made. The chart can be found here.

Per U.S. Department of State regulations, a J-1 professor, research scholar or short term scholar not sponsored by Columbia University Program number P-1-00381 must provide a statement from their J-1 Sponsor (either the Responsible Officer or an Alternate Responsible Officer may sign) granting permission for them to receive payments from Columbia University.

Honoraria for Foreign Individuals who did not travel to the United States

In accordance with the Payments to Foreign Nationals and Entities Policy, Nonresident aliens doing business with the University are required to provide a completed and signed Form W-8.

Please note: Under IRS regulations, honoraria payments are considered taxable income. Therefore, as a matter of policy, the recipient of an honorarium payment may not transfer the payment to another organization or individual. If the honorarium recipient wishes to transfer the payment to another organization or individual, he or she must receive the money and then donate it. The only exception to this rule is employees of certain Federal Government Agencies.