Educational Student Stipend Regulation 313

Regulation 313 Approved: January 28, 2019
Educational Student Stipend Regulation
Regulation 313
Source of Authority:

N.C.G.S. § 116-34(a)
UNC Code § 502(A)
IRS Tax Topic #421

Revision Authority: Chancellor

First Issued: April 8, 2013
Revised:  January 28, 2019

Related Regulation:

Accounts Payable Regulation 301

Responsible Offices: Controller's Office
Effective Date: January 28, 2019

I. Purpose

The purpose of an Educational Stipend is to support and enhance the overall student educational experience. The purpose of this regulation is to explain how to categorize payments made to students in support of their education-related activities. This document also outlines procedures to be used in making their payments and clarifies the income tax implications of receiving such payments.

II. Scope

This regulation applies to all departments utilizing educational stipends to support students as well as the students receiving stipends.

III. Definitions

A.  Stipend - For the purpose of UNCSA, the term "Stipend" is used to describe a payment to an enrolled student to support a training/learning experience. There are two-type of educational student stipends: service (work-related) stipends and nonservice stipends.

1.  Service stipends are payment to any student who is required to perform services in order to receive the payment is a service or “work-related” stipend.

2.  Nonservice stipends are amounts paid to individuals who do not provide any services, and which are not academic awards.

Note: Federal and State tax regulations do not define the term 'stipend' but use the terms ‘scholarship’ and ‘fellowship’:

B.  Scholarship - A scholarship generally is an amount paid for the benefit of a student at an educational institution to aid in the pursuit of studies. The student may be in either a graduate or an undergraduate program.

C.  Fellowship - A fellowship grant generally is an amount paid for the benefit of an individual to aid in the pursuit of study or research.

IV. Regulation

A.  Educational Student Stipend Payment

1.  Only enrolled students in the University are eligible to receive a student stipend.

2.  Student stipends are the fiscal responsibility of each department. Each department is responsible for ensuring that the student(s) meet(s) all the requirements of receiving a stipend.

B.  Taxes

Generally, payments to students for stipends are taxable income to the recipient unless specifically excluded from taxable income by the IRS.

V.  Revision History

1. April 8, 2013: Adopted by the Chancellor

2. January 28, 2019; Revised to reflect changes in tax law.

University of North Carolina School of the Arts
Educational Student Stipend Procedures
Procedure 313

I.  Processing Student Stipend Payments

In order to process a student stipend payment, the department must determine what type of stipend (academic awards/stipend, service stipend, or nonservice stipend) to be issued.  Once you determine the appropriate stipend to be disbursed to the enrolled student and then processed the applicable paperwork based on the types of stipends identified below.

1.  Academic awards/stipends, commonly referred to as scholarships and fellowships, are made to, or on behalf of, degree candidates to pay for educational expenses. There are two types of educational expenses: qualified and nonqualified. 

  • Payments required by the educational institution and recognized by the IRS as “qualified tuition and related expenses” are tuition and fees required for enrollment and books, supplies and equipment required for courses taken.
  • Payments to students to enable them to attend a school that is not qualified education expenses as defined above. This funding does not require the recipient to perform services such as serving as clerks/interns, or assisting with teaching, research or other academic work.
  • All academic awards MUST go through the financial aid system. Please contact the Financial Aid office for the process.

2.  Service (work-related) stipends -Payment to any student who is required to perform services in order to receive the payment is a service or “work-related” stipend. Examples -Assistant teaching, performances, research or other academic work, student government leader, etc. 

  • All service type stipends must be processed through Payroll during the month-end payment cycle.
  • For these type of stipends, use account code 614510 for undergraduate students and account code 614511 for graduate’s students.
  • Use the HR Form 401-Temporary-Flat Rate form to initiate paperwork and payment.
  • Payment will be made via month end payroll.

3.  Nonservice stipends - Non-service stipends are amounts paid to individuals who do not provide any services, and which are not academic awards. Examples, Token payments and other one-time monetary awards for being the subject in a study, completing a survey, providing samples.

  • Non-service stipends are paid through our Accounts Payable Office.
  • Using the account code is 769100 for non-service stipends.
  • Use the educational student stipend form.
  • Send to Accounts Payable for processing of payment.