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wm030303
wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience:  I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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I am a medical researcher at a university. I pay my subjects

Resolved Question:

I am a medical researcher at a university. I pay my subjects approximately $200.
1. Do I need to file a W-9 for subject compensation. I recruit subjects who are students, pay them for their participation.
2. Can I pay Canadian students who do not have social security numbers. Would they have to complete a W-8
Submitted: 2 years ago.
Category: Tax
Expert:  wm030303 replied 2 years ago.

wm030303 :

Hello and welcome to Just Answer my name isXXXXX need to file a W-9 form to obtain a valid taxpayer identification number from an individual and substantiate that they are not subject to backup withholding. As far as reporting this income to the IRS on a 1099 misc form is concerned, you would not be required to report these earnings if you paid these individuals less than $600.

wm030303 :

As far as the W-8 form is concerned....

Customer:

Do you agree with assessment that subject compensation is not payment for services rendered?

wm030303 :

yes

Customer:

The instructions for the W8 talk about income from compensation for or in expectaion of services performed. I am thinking that subject compensation does not fall under this category. And clearly none of the others fit

wm030303 :

It would be classified as other income on form 1099 if $600 or more

wm030303 :

You should not file the W-8 form if the income is less than $600

Customer:

Is there any rule against paying Canadians subject compensation less than $600

Customer:

these are students who are not eligible for employment in the US without going through a special application process. Since it is not a job, I need some evidence to show the accountants that we can pay them. i.e. the IRS doesn't care if we give these canadian students $200

wm030303 :

I don't believe there is any rule that prohibits you from paying Canadians less than $600

Customer:

Any thoughts on some obscure line in the tax code that would convince our accountants?

wm030303 :

I'll look into that give me a while

Customer:

Thanks

wm030303 :

In IRS publication 519 on page 46 you do not need to file a US Non Resident Alien form 1040NR if you were a non resident alien student who was temporarily present in th USA under a F J M or Q visa.

Customer:

I will present this info to our administration and see what happens. Thanks for your help

wm030303, Enrolled Agent
Category: Tax
Satisfied Customers: 112
Experience: I am both a CPA and EA with over 30 years of experience in solving tax related issues.
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