Prizes and Awards
When are prizes or awards considered a Scholarship?
The Department of Education considers payments or winnings because of enrollment at a postsecondary institution or for the purpose of aiding a student’s study, training, or research as scholarships or fellowships. If the intended recipient of any prize or award is a student, federal regulation mandate that any financial assistance shall be included in their financial aid package and reported to the IRS on Form 1098-T. Cash prizes for contests that are exclusive to students shall be awarded through The Branch and processed as a student scholarship.
When would a prize or award NOT be considered financial assistance and not be reported to the Financial Aid Office?
- Recipient is not required to be a student and the contest is open to multiple audiences. For example, a random drawing at a sporting event open to students and general public.
- When the contest is limited to students in which the prize is a tangible good considered de minimis in value. For this purpose, de minimis is defined as non-cash items having a value of $75 or less. De minimis gifts, prizes and awards are not considered taxable income and are the preferred method of tangible recognition. An example would be a t-shirt.
- When the prize is related to employment (student worker), see compensation.
Documentation Requirements for Prizes and Awards
Prizes and awards should be documented with the Distribution of Prizes and Awards Form per the Prizes and Awards Guidelines. The Procurement Card is the preferred method to purchase prizes. The itemized receipt and Distribution Form should accompany the monthly Procurement Card report to substantiate the purchase. These do not need to be reported to the Financial Aid Office. Students receiving cumulative prizes and/or awards from the University in excess of $600 in a calendar year will receive a 1099 Miscellaneous Income Form.
NOTE: Neither the Foundation nor the University will reimburse any faculty or staff member for payments made to students or on behalf of students.