300.1 - Introduction
An honorarium is a payment made to an individual, usually for providing a service such as a lecture or a music performance, for which no specific fees were required or requested by the individual. If fees are requested or required by the individual, the payment is not considered an honorarium for income tax purposes. Rather, it is likely to be considered a payment to an independent contractor. See Section 200 for additional information on payments by Washburn to independent contractors.
300.2 - Taxability of Honoraria
Generally speaking, honoraria are considered taxable income to the recipient. This is because the honorarium would not have been paid if the individual had not provided a service of some nature. There is an exception to this rule: if the honorarium is paid to a 3rd party (such as a professor's University, or to a charity in the professor's name, etc.), and never offered to the individual, the honorarium is not taxable income to the individual. This is because the payment did not personally benefit the individual, nor did the individual have any influence or control over who ultimately receives the honorarium payment.
300.3 - Examples
Example #1
A biology professor speaks at an academic convention and receives a cash payment from the organizers. The payment was not requested or required by the professor as a condition of giving the speech. This is a taxable honorarium, and the professor must include the honorarium as income on her income tax return. [1]Example #2
A law professor presides over a mock trial competition. He is offered a cash payment from the organizers; the payment was neither requested nor required by the professor. Rather than accept the payment, the professor requests the payment be made to the School of Law. This is a taxable honorarium, because the payment was offerred to the professor. [2]Example #3
A nursing professor presents a paper at a regional conference. She neither requests nor requires any payment from the conference. In appreciation of her presentation, the conference organizers make a payment to the School of Nursing in the professor's name without asking for the professor's input or offering the payment to her first. This is a non-taxable honorarium, because the professor did not exercise any influence or control over the payment to the School of Nursing. The amount of the honorarium is not included as income on her income tax return.
Notes:
[1] Internal Revenue Code Sec. 61
[2] Treasury Regulation Sec. 1.61-2(c)
The WUTH is presented here in HTML format. Click on the links in the link box on the right to go to a specific section of the handbook. A printable version of the handbook in PDF format will be forthcoming in the future. Significant portions of the WUTH are adapted from The Texas A&M University System Tax Manual, the nonresident alien tax websites of Towson University, Cornell University, and The University of Missouri, and information provided by Arctic International LLC.