George Mason University

A traditional honorarium is a one-time payment that is a token of appreciation paid to an individual who is not a Mason employee or student for a special and non-recurring activity or event for which no payment is required. Honoraria are typically paid to persons of distinguished scholarly or professional standing with the intent of showing appreciation for participation in University education, research or public service activities. There is no contract, the fee is not set or negotiated by the recipient, and the honorarium may not be paid to a third party.

An honorarium may include consideration for travel expenses that are not reimbursed with a Travel Reimbursement voucher.

Examples include:

• A guest lecturer distinguished in his/her field
• A noted scholar participating in a symposium
• A minister or cleric providing an invocation
• A distinguished alumnus invited to make brief remarks at the dedication of a new campus building

An operational honorarium payment is a payment that is a token of appreciation paid to an individual who is not a Mason employee for an activity that supports Mason operations for which no payment is required. Honoraria are typically paid to individuals with the intent of showing appreciation for participation in University education, research or public service activities. There is no contract, the fee is not set or negotiated by the recipient, and the honorarium may not be paid to a third party.

Examples include:

• A volunteer judge for the Patriot Games
• A volunteer swim official for community swim event
• A cooperating teach for a College of Education and Human Development program

Required Process:

1. Prepare the following documents:
   • Honorarium Payment Request
   • W-9 Form
   • Employee/Independent Contractor Evaluation Form
   • Justification Letter (if required)
   • Letter of invitation stipulating the dates and the purpose of activity.
2. If the payment is $2,000 or more:
   • Process the request in eVA and attach the Honorarium Payment Request to the eVA order.
   • After processing the request, Purchasing will forward to Accounts Payable for payment.
3. If the payment is less than $2,000:
   • Send all required documents to Accounts Payable in Fiscal Services at 4400 University Hall, MS 3C1.
4. U.S. Citizens and Permanent Residents will receive an IRS Form 1099MISC if required.

Required Process:

1. Use the Determination of the Tax Status table to determine the documents required from the visitor.
2. Determine the appropriate tax treatment on honorarium payments for nonimmigrants
3. Prepare the required payment forms:
   • Completed Honorarium Payment Request
   • IRS Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. (review W-8 BEN Instructions).
   • Employee/Independent Contractor Evaluation Form
   • Letter of invitation that stipulates dates and purpose of visit.
   • Justification letter (may be requested)
4. If the payment is $2,000 or more:
   • Process the request in eVA and attach the Honorarium Payment Request to the eVA order.
   • Send the completed request with all required documents to the International Tax Office at 4400 University Hall, MS 4B2 for review and appropriate tax calculation.
   • After processing the request, the International Tax Coordinator will forward onto Accounts Payable for payment.
5. If the payment is less than $2,000:
   • Send all required documents to the International Tax Office in Fiscal Services at 4400 University Hall, MS 4B2 for review and appropriate tax calculation.
   • The International Tax Office will forward the documents to Accounts Payable at MS3C1.
   • NOTE: International Tax Office reserves the right to request additional documents if the information contained in the documents mentioned above does not provide sufficient information to determine Mason’s tax withholding responsibilities.
6. International Tax Coordinator will determine the tax status, the amount of tax, and eligibility for tax treaty benefits according to the information provided by the department and honorarium recipient.
7. After processing the request, the International Tax Coordinator will forward to Accounts Payable for payment. The following documents will be sent:
   • Completed Honorarium Payment Request.
   • Independent Contractor Evaluation Form.
   • Letter of invitation.
   • Copy of W-8BEN, W-9, or 8233(tax treaty benefit form) as appropriate.
   • Certification of Eligibility form (if required).
8. At the end of the calendar year, non-immigrants will receive an IRS Form 1099MISC or an IRS Form 1042S.
9. Thirty percent (30%) tax may be withheld from all payments to non-U.S. citizens unless the individual is eligible to claim a tax treaty exemption.
10. Non-immigrants must report all honorarium payments to the Internal Revenue Service (IRS).

Determination of the Tax Status

Determine the appropriate tax on honorarium payments for nonimmigrants

The tax on honorarium payments for nonimmigrants whose tax status is Nonresident Alien is
30% unless a tax treaty applies.

Since non-employment income is not generally considered to be effectively connected income with a U.S. trade or business, honorarium recipients are unable to file a tax return requesting a refund of the tax.

Therefore, departments may choose to absorb the tax by “grossing up” the payment amount. The formula is (gross amount / .70) For example, the amount to pay the foreign visitor is a $500 honorarium. In order to make sure the individual actually receives $500, the Honorarium Payment Request should be $714.29 ($500/.70). $714.29 less 30% = $500.