Incentives to Participants
Policy Number: 5.5.13-P
Current Effective Date: 07/01/2017
Original Effective Date: 03/30/2007
Revision Dates: 03/30/2007, 05/30/2017
Revision Number: 2
Responsible Official: Director of Payroll
To outline the process for paying incentive payments to study/program participants.
This procedure applies to study/program participants.
3. Incentive Payments
Incentive payments must be treated the same as handling cash and cash equivalents, including the use of applicable controls and safeguards. The program manager and each person handling cash and non-cash incentives must complete and sign an acknowledgement of KCTCS and local college cash handling procedures prior to managing incentives for a program.
All incentive payments must be coordinated in advance through the college’s business office and authorized by the KCTCS System Director of Business Services.
Cash and Cash Equivalent Payments
- An Imprest account may be established for cash payments to participants.
- Study/program participants must sign a receipt acknowledging the incentive.
Other incentive payments
- Non-cash incentives should be de minimis in value. The term de minimis used here meaning something that is so small or insignificant, to be considered of nonimportance.
- Participants must sign a receipt acknowledging acceptance of the incentive.
Incentive payments that are not of a de minimis value are taxable.
- Non-employee participants
- Per IRS ruling, participant payments with a value exceeding $100 cannot be considered de minimis.
- Non-employee participants receiving an individual participant payment exceeding $100 or receiving combined participant payments of $600 or more in a calendar year must provide a completed W-9 tax form prior to participating in the study or program. These payments will be recorded as taxable and participants will receive a 1099 tax form.
- An exception to the requirement to submit a W-9 may be granted if the program/study
is of a highly sensitive nature and a statement of confidentiality is required and
has been secured in advance.
- The program manager must submit a formal written request in advance to the KCTCS System Director of Business Services to receive an exception.
- Employee Participants
- Per IRS REG 3102, payments to individuals in an employer/employee relationship are considered wage for taxation purposes.
- Employee participants will be paid incentive payments through payroll. Cash payments to employees in any amount are taxable.
5. Record Keeping
The individual program manager is responsible for:
- Maintaining detailed records for each participant and each incentive/payment for audit purposes.
- Collecting W-9 tax forms and remitting to the KCTCS Office of Procurement to Payment Services when and where applicable.
- Issuing one-time payment forms to local college Human Resources and Payroll offices to generate employee incentive payments.