General Information and Forms
When the University distributes an award/prize in cash or non-cash form unrelated to employee recognition, the award/prize is considered taxable to the recipient, regardless of the amount. The university may be required to report the value of award/prize to the Internal Revenue Service. Examples include winning academic or sports competitions, receiving recognition for non-employee performance or achievement, or winning a door prize or drawing. An Award/Prize Tax Data Collection Form must be completed by the awarding department and the awardee before providing the prize to the recipient. The recipient may be an employee, student, or other affiliate.
When distributing awards or prizes for employee recognition, use the Employee Recognition Award Compensation Form and follow policy and procedure in 9.11 Employee Recognition instead.
A completed Award/Prize Tax Data Collection Form should never be emailed, as the form requires the provision of sensitive information. This form must be submitted securely within 10 business days by one of the following methods:
- Attach to the Disbursement Voucher (DV) for the award/prize expense.
- Submit the form via the Procure to Pay Services secure document upload if a DV is not initiated for the award/prize expense.
A recipient has the right to refuse an award if they are unwilling to provide the required information on the form. A prize recipient can also be provided with a copy of the form on request.
Award/Prize Tax Reporting Obligation
Awards/prizes are considered taxable to the recipient regardless of the receipt of a tax form. Recipients should consult with a professional tax advisor if there are questions about their obligations. University employees, while in their official capacity, are not allowed to act as tax consultants or provide tax advice.
The university will report awards/prizes based on recipients’ relationship to the university and their tax residency status as follows:
Employees: Value of award/prize will be included in wages and reported on Form W-2, regardless of amount.
Non-employee U.S. citizens or permanent residents: Value of award/prize will be reported on Form 1099-MISC if the total value of awards provided by the university during the calendar year meets or exceeds the IRS annual reporting threshold. Please refer to 1099-MISC and 1099-NEC Reporting Threshold Table.
Non-employee nonresident aliens: Department providing award/prize is responsible for gross-up withholding. Value of award/prize and gross-up withholding will be reported on Form 1042-S, regardless of the amount.