8.10.4 Prizes and Awards

Policy Statement

No restrictions are placed on how a student can use prizes and awards. If the source of the prize or award is gift funds, the donor may set the criteria for recipient selection, but may not select the recipient.

Reason for the Policy

Prizes and awards are reported to the Office of Student Financial Aid (OSFA) and considered a resource when determining the student's financial aid eligibility. Therefore, these payments may have an impact on the type and amount of financial aid the student is eligible to receive. OSFA will make the necessary adjustments to the student’s financial aid upon receiving notification of the payment. These adjustments may create or increase a balance due on the student’s university account. The University of Illinois System’s reporting responsibility with respect to Federal Student Aid (FSA) and any other financial assistance received by students is outlined in Volume 3 of the Federal Student Aid Handbook, specifically Chapter 7. For additional information, see Payments to Students.

Applicability of the Policy

Students receiving prizes and awards. Recipients of prizes and awards are typically selected through a contest or competition, or in recognition of some sort of charitable, scientific, educational, artistic, literary, or civic achievement, and are not restricted to educational purposes.

Procedure

 

The Banner account code used for prizes and awards issued to students is 181700; the program code rolls up to NACUBO function 1789.

Prizes and awards are reported as taxable income to the IRS and the recipient on Form 1099-MISC, Miscellaneous Income, by University Payables (UPAY). A Social Security Number (SSN) is required for IRS Form 1099-MISC reporting. Therefore, payment of prizes and awards will be suspended if no valid SSN record exists in Banner. Before submitting prize and award requests, units are strongly encouraged to check Banner form SPAIDEN for asterisks in the SSN field and to instruct recipients whose SSN field is blank to present documentation of their SSN to their Registrar’s Office.

The IRS imposes different tax requirements for Nonresident Alien recipients of prizes and awards; for details please visit Award, Prize and Human Subject Payments.

Units must follow applicable requirements for processing these payments. Guidance for reporting payments and additional instructions are described in Payments to Students.

Last Updated: March 18, 2020 | Approved: Senior Associate Vice President for Business and Finance | Effective: March 11, 2019