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MequonCPA
MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2324
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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Is a stipend given to a volunteer in exchange for services ...

Resolved Question:

Is a stipend given to a volunteer in exchange for services considered taxable income in NY?
Submitted: 6 years ago.
Category: Tax
Expert:  MequonCPA replied 6 years ago.

How much was the stipend.

What services were performed

Customer: replied 6 years ago.
Reply to Steve's Post: The stipend varies according to a sliding pay scale. At the most is it 75.00 per hour. The services are for divorce mediation at a non-profit agency.
Expert:  MequonCPA replied 6 years ago.

DearCustomer-

At that rate, the individual is not a volunteer, but is a consultant. However, they are probably being paid at rate lower than their standard billing rate. The amounts received for these services is taxable income to the recipient.

The main concern is the relationship the individual has with the entity they are providing services for. There are factors that should help to determine if the individual should be an employee or independent contractor.

I have provided a link to a Twenty Factor Checklist to Determine Independent Contractor vs. Employee Status

http://smallbusiness.findlaw.com/business-forms-contracts/business-forms-contracts-a-to-z/form1-21.html

 

 

 

 

MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2324
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
MequonCPA and 4 other Tax Specialists are ready to help you
Customer: replied 6 years ago.
I would like to do a follow up question with Steve if possible.

Is there any case where a stipend would be tax free money to a mediator? Some mediators collect a stipend and are told that is it tax free money. That does not make sense to me. Where can I find more info on the stipend? And the difference between a stipend and a reimbursement. There seems to be confusion on this area.

Thanks!!!
Expert:  MequonCPA replied 6 years ago.

DearCustomer-

It is possible that a stipend could be tax free if the amount related to unreimbursed out of pocket expenses and had no correlation to services performed.

Excerpt from IRS web site, link below

Grants given to students, trainees, or researchers which require the performance of personal services as a necessary condition for disbursing the grant do not qualify as scholarship or fellowship grants. Instead, they are compensation for personal services considered to be wages. It does not matter what term is used to describe the grant (for example, stipend, scholarship, fellowship, etc.).

http://www.irs.gov/businesses/small/international/article/0,,id=106193,00.html

 

MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2324
Experience: CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
MequonCPA and 4 other Tax Specialists are ready to help you

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