In general, all payments for the compensation of services that are made to University employees will be treated as employee’s wages. This includes:
- Base pay
- Supplemental payments (compensation for work performed outside the normal scope of their appointment)
- Awards (i.e. outstanding teaching awards or employee recognition awards)
In circumstances where an employee is given a choice between accepting a cash payment or having those funds directed into a University account, IRS tax law requires that the amount of the award be treated as employee wages, regardless of whether the employee elects to receive the cash or not. Employer provided “non-cash” taxable compensation of fringe benefits, such as employer provided vehicles, complimentary tickets, and club memberships are subject to federal income, state income and Medicare tax rules. Internal Revenue Code Section 1.61-1 states that all compensation paid to, or on behalf of, an employee constitutes wages subject to income and employment tax withholding unless specifically excluded by IRS code.
Retired faculty or staff members will still be considered to be employees unless they provide evidence that he/she has an established a trade, business or professional entity having a tax identification number separate and distinct from the individual's social security number.
Taxable Income
The following is a list of non-cash taxable compensation or benefits identified by the University of Nebraska-Lincoln City Campus as being subject to tax withholding and Form W-2 reporting as taxable income.
Car Leasing - Vehicle Usage (Personal)
It is the department's responsibility to submit the monthly vehicle usage reports for its employees to the Payroll Office by the 16th of the month following the usage. It is also the department's responsibility to submit to the Payroll Office by January 15th of each calendar year, a listing of all their employees who have a university vehicle that may be used for personal mileage.
Club Membership
The value of University-paid club memberships and related expenditures to the extent that such activities are not each sufficiently documents to be serving a bona-fide University business purpose. It is the Department’s responsibility to submit a copy of the payment for all memberships to the Payroll Office. The value of the membership will be considerable taxable at the time it is paid. It is the department’s responsibility to notify the Payroll Office prior to December 15 of each calendar year as to what portion of the membership was business use. This notification must be a statement in writing signed by the employee and his/her supervisor. Upon receipt of notification, the Payroll Office will make any entry to decrease the taxable value for the business portion.
Gifts, Gift Certificate/Cards
Gifts not readily convertible to cash and $50.00 or less in amount are not considered as taxable. Any other gifts, including cash, checks and/or gift cards of any amount are considered as taxable income. This does not apply to length of service awards.
Moving Expense
The value of employer-paid moving expenses that are non-qualified and subject to withholding whether paid to an employee or a third party. i.e. cost of meals while traveling, expenses of a house-hunting trip and temporary living expenses.
Rent
The market value of University provided housing or payment of housing costs where housing is determine to be a personal benefit.
Complimentary Tickets or Passes
The face value of season tickets for which there is no documented University business purpose is taxable. The face value of occasional individual tickets or passes to events is considered de minimis and not taxable.
Spousal Travel Benefit
The value of University paid travel for the spouse of a University official when the spouse’s attendance serves no documented official University business purpose.
Taxable Benefit/Compensation
The value of miscellaneous taxable benefits or compensation paid by departments on behalf of their employees.
IRS Taxable Fringe Benefits -IRS / SSA
Payments Made Via Foundation Funds
It is the department's responsibility to complete the proper form for payments via Foundation Funds. There are three types of forms which may be used for foundation payments. University Foundation Forms can be obtained on SAPPHIRE.
Request for Payment from Foundation Funds
Complete this form to initiate a Foundation payment directly to a third party. Submit this form to the campus Payroll Office (401 Admin, 0436) for processing. Do not mail this form to the Foundation. Direct payment of university expenses by the Foundation should be discouraged. The Foundation is a private entity that is not exempt from sales and use tax.
Recording Industry Income
This form should be completed to record donations made directly to the University of Nebraska- Lincoln. Submit this form to Sponsored Programs (312 N 14th Street, Alex West, 0430). Do not mail this form to the Foundation.
Request for Transfer from Foundation Funds Form
Complete this form to request a transfer of funds from the Foundation. Submit this form to Sponsored Programs (312 N 14th Street, Alex West, 0430).
Nonresident Alien Payments
It is the department's responsibility to submit the proper paperwork relating to payments to nonresident aliens.
All payments made to B1/B2 visa holders or waiver participants must have the certification form attached. The certification form and instructions are available on SAPPHIRE.
All honorarium payments must include the individual's social security or individual taxpayer identification number (ITIN).
Any request for payment made to a non-resident alien must include a legible copy of their visa or waiver notification.