Prizes & Awards to International Students and Visitors
Please visit Student Prizes & Awards for a detailed discussion on prizes & awards given to students. Prizes/awards are amounts received by an individual primarily in recognition of religious, charitable, scientific, educational, artistic, literary or civic achievement or received because of entering a contest.
IRS regulations require that an NRA receiving a prize/award be subject to 30% federal tax withholding on the payment. Currently, IU does not offer tax treaty provisions to exempt a prize/award from the 30% tax withholding. Hence, when IU receives a Disbursement Voucher for a prize/award to an NRA, IU will withhold 30% from the prize/award amount and remit it to the IRS. The balance will be issued directly to the individual. At the end of the calendar year, an appropriate 1042-S tax reporting form will be prepared by IU and sent to the individual.
Reporting Taxable Prizes and Awards
A prize/award is processed in one of two manners to ensure appropriate reporting by the Indiana University.
· Cash prize
- Processed through a disbursement voucher. The payment reason needs to be Prize and/or Award and use object code 4866. Please note, documentation on how the contest was conducted should be provided in the DV notes section.
· Non-cash prize
- Prize Tax Data Collection Form. Refer to Indiana University Fiscal Policy VII-4 for processing guidance.