It is important to identify whether or not payments to an individual are paid as compensatory or non-compensatory payments:
- Non-compensatory recipients are not employees. They are not providing a service for or on behalf of Duke.
- From a compliance perspective, employees and payees must be handled separately since reporting and withholding requirements are different between the two groups.
- The type of payment determines whether a foreign national recipient requires a Social Security number or an Individual Taxpayer Identification number (ITIN).
- The IRS can impose fines for misclassifying compensation as non-compensation.
To determine whether or not a payment is compensatory or non-compensatory, we have a decision tree quick reference that can be reviewed.
Below are a few examples of acceptable and unacceptable non-compensatory payments:
| Acceptable | Unacceptable |
|---|---|
| A Duke student receives financial support to do research solely for her thesis that is needed for her degree. The research is not for, nor does it provide a benefit to a faculty member. | A faculty member is working on a project and pays a student to assist with the research. The student participation is not a degree requirement. If the student was not assisting with the research, the faculty member would have to hire someone else to do the work or do it herself. |
| A student is paid a stipend to participate in a conference directly related to their graduate studies. No work is performed. | A student is paid a stipend to attend a faculty member’s conference, arrange seating, mail invitations, and provide chauffeur service to/from hotels. |
| As part of a degree program, a Duke student is paid to participate in a educational enrichment opportunity requiring no services at an outside organization where he will focus on learning research techniques. He will not be providing a service to the outside organization, but is in a learning role. | A student is paid as an intern in a Duke department or with a partner institution for providing research assistance. There is no program designed to train students as part of their degree requirements. The student is providing a needed service. |