Grants Management - Human Resource Transactions
Fellows are not employees. While fellows may contribute significantly to sponsored projects, they are understood to be trainees and their support is not for services rendered. They receive stipends as opposed to salaries and wages. Fellows are issued 1099 forms rather than W2 forms at the end of the calendar year. The taxability of their stipends is governed by a complex collection of principles and rulings by the IRS. Fellows receive no fringe benefits by virtue of their appointment, and no fringe benefits are extracted from the sponsored projects which provide their stipends.
For additional information, see our Fellowship Quickguide.
Graduate School Tuition Policy and Salary
Policy NamePolicy on Tuition Remission for Graduate Students Supported by Sponsored Projects
Initial Policy DateFebruary 27, 2004
Revision DatesOctober 14, 2004; March 15, 2009; June 25, 2009
Authorizing OfficialsJohn H. Marburger, III, Vice President for Research
Lawrence Martin, Dean of the Graduate School
PurposeThe Graduate School and the Office of the Vice President for Research aim to attract and retain top quality students to Stony Brook University’s graduate degree research programs by offering competitive recruitment packages including excellent salaries, benefits and tuition remission. The purpose of this policy is to advise Principal Investigators on charging directly to sponsored projects a portion of tuition for graduate students assigned to and supported by a sponsored project during the Fall and/or Spring semester(s).
ScopeThis policy applies to all faculty and Principal Investigators who submit grant, contract, or subcontract proposals to external funding sources that if awarded, will be managed by The Research Foundation (RF).
Policy StatementAll proposals for sponsored research, teaching/training, or public service projects which include salary support for graduate students must also include a request for graduate student tuition remission. Tuition at the current NYS rate, for six (6) credits per semester (Fall and Spring only), per graduate student, is to be included in the proposal budget as a direct cost line item. Tuition remission costs are excluded from fringe benefits or indirect cost assessment.
Exceptions and WaiversExceptions to this policy may be granted by the Dean of the Graduate School in cases where sponsors have a written policy prohibiting the charging of tuition as a direct cost to the sponsored project.
Waivers of tuition remission may be granted under the following circumstances:
- when the proposal is for a small award where total funding available to the PI(s) for the project will be less than $50,000 per year AND
- fifty percent (50%) of direct costs are budgeted for graduate student salaries;
- when the graduate student being supported is teaching full-time (15-20 hours per week) in addition to the work being conducted as a research assistant.
Exceptions and waivers should be submitted to the Department Chair and Dean of the Graduate School prior to submission of the proposal to the sponsor. Note: where exceptions or waivers are authorized by the Chair and Dean of the Graduate School, the Principal Investigator shall indicate that six (6) credits of tuition at the NYS rate will be covered in the form of a university contributed tuition scholarship and the “waiver” box should be checked on the graduate students appointment form.
ImplementationTuition remission for graduate students will be charged at six (6) credits per semester (Fall and Spring only), per RA, at the NYS tuition rate. For proposals submitted on or after March 15, 2004 through March 14, 2009, the prior NYS rate of $1,725 will continue to be charged per graduate student, per semester (Fall and Spring only) throughout the life of the resulting award. For proposals submitted on or after March 15, 2009, tuition will be charged at the current NYS graduate tuition rate effective Spring 2009 ($1,970) and effective Fall 2009 ($2094) per graduate student, per semester (Fall and Spring only) throughout the life of the resulting award.
Allocation and Utilization of FundsTwo thirds of tuition remission collected will be allocated to and used by the graduate program under which the funded graduate student is enrolled (either to the Chair or Graduate Program Director, depending on where fiscal responsibility for the salary resides). Use of these funds is restricted to graduate program support. One third of the tuition remission revenue will be allocated to and administered by the Graduate School and the use of these funds will be restricted to stipends or salary support for graduate students (e.g. supplements or program expansion through additional lines).
ResponsibilitiesThe Principal Investigator is responsible for including tuition remission as a direct cost budget item in proposal applications. The Office of Sponsored Programs is responsible for ensuring that tuition remission is included in proposals per this policy and identified on the internal approval and routing form (Four page form-SUSB 299) and for notifying the Principal Investigator of a resulting sponsor award. The Office of Grants Management is responsible for charging the tuition remission to the appropriate award(s) and transferring the funds to the Graduate School. The Graduate School is responsible for transferring two-thirds of the funds to the appropriate Department Chair or Graduate Program Director and retaining one-third for the Graduate School.
Reporting RequirementsThe Chair or Graduate Program Director is responsible for reporting annually on the use of tuition remission allocations to their respective Dean, the Vice President for Research, and the Dean of the Graduate School. The Graduate School is responsible for reporting on the use of its tuition remission allocation on an annual basis to the Graduate Council.
Employee Appointment/Change Formshttp://naples.cc.sunysb.edu/Admin/HRSForms.nsf/256ae0f317db831085256a6f00699bd4/4bab8dd6ed5e019885256aa2005e30bd?OpenDocument
Income Fund Reimbursable (IFR)
In SUNY, the University is a State agency while The Research Foundation is a private non-profit corporation operating under a contract with SUNY.
The contract provides for The Research Foundation to be able to collect salaries paid from sponsored projects on behalf of the State and to reimburse the State for salaries of State salaried employees (typically, faculty) for effort on a sponsored project. This permits the relevant State employee to continue to receive his/her salary from the State alone rather than to receive salary from two separate organizations.
Income Fund Reimbursable transactions (Salary Offsets) are the transactions used to recover the value of the salary and fringe benefits paid to state funded faculty and staff devoting effort to research grants. These funds are transferred as payments from the appropriate grant account to the department's state IFR account as reimbursement for the effort provided to the research project that was initially paid for by the state. These are time sensitive transactions treated as actual personnel appointments to the research grants and directly tied to The Research Foundation effort certification process mandated by the federal government.
IFR transactions should be initiated within the first month that effort is being devoted to a research project and in no case should they be processed beyond the current semester. The effort certification process is run on a semester basis three times a year and is fed by the IFR transactions. Retroactivity that extends prior to the current semester causes conflicts with effort certification and cannot be accepted.
Independent Contractor / Consultant
Consultants are assumed to be Independent Contractors with defined tasks and benchmarks. They may not have a continuing involvement in a project and should not require significant supervision. Consultants are neither employees nor Fellows. They are paid through contractual agreements in which the services they provide are detailed. Since their relationship to a project is contractual, the selection of specific consultants is governed by processes more like the purchase of goods and services than the process by which employees are hired, or Fellows appointed.
Consultants understand the following conditions describing their relationship with The Research Foundation of the State University of New York:
- Not eligible to file for, or collect unemployment benefits,
- Not eligible for Worker’s Compensation coverage,
- Solely responsible for complying with all federal, state and local requirements regarding reporting and paying taxes,
- Required to assign all right, title, and interest in the data or material produced as a result of project activities to The Research Foundation of the State of New York, and prohibited from publishing, permitting to be published, or distributing any information concerning the results or conclusions of the data or material produced during or towards project activities. These are considered “works for hire” and as such are the property of The Research Foundation of the State of New York.
- Able to retain ownership of intellectual property included in the deliverables to the extent that s/he will have independently developed the intellectual property without Research Foundation financial support. With respect to such property, s/he agrees to grant The Research Foundation of the State of New York a royalty fee, non-exclusive license to use such intellectual property for purposes consistent with The Research Foundation’s obligations under the grant or contract that funds this project.
- His/her engagement as an Independent Contractor with The Research Foundation may be canceled by the Foundation upon 30-days written notice.
The IRS uses a series of 20 Factors of the “Common Law Test” to determine whether an individual or group of individuals meets the legal requirement to be considered a consultant. For additional information on this topic, see the Quickguide for using Consultants/Independent Consultants.
Non-Resident Alien Consultant/LecturerRecent changes in IRS regulations governing payments and related income tax withholding to non-resident
aliens has caused an additional administrative burden to be placed on campus departments.
Care must be taken to ensure that non-resident aliens are eligible to receive payments for work performed in this country (based on Immigration and Naturalization Service regulations) and that if eligible for payment, can legally be exempt from the 30% federal withholding tax.
If you are planning such an engagement and are not familiar with these requirements, it is important that you contact your Grants Specialist prior to engaging the consultant. Certain essential documents can only be obtained when the consultant/lecturer first enters the United States.
Related Link: Independent Contractor/Lecturer Services form.
If you would like additional information please contact your Grants Management Specialist at 632-9038.
The Twenty Factors of the "Common Law Test"
All of the following factors must be considered in determining whether an employment relationship exists:
- Compliance with instructions
Employees must comply with another person's instructions on when, where, and how the work is performed. In a true independent contractor relationship, the only control to which the contractor is subject is the result.
- Training required
Independent contractors are not normally trained but rather are hired for their expertise in a field.
- Integration of services into business operations
Employees' services are usually a vital part of the daily operation of an employer's operation.
- Services rendered personally
Employees personally render the services, while contractors may delegate such work to others.
- Hiring, supervising and paying assistants
Usually individuals who perform all these functions are treated as independent contractors.
- Continuing relationship
Employees are usually hired for an ongoing period, while a contractor's work ends when the job ends.
- Set hours of work
Employees usually must adhere to a work schedule established by the employer.
- Full-time required
Generally, employees work full-time for an employer, while independent contractors work when and for whom they choose.
- Performing work on the employer's premise
Those working at the employer's site may be viewed as employees.
- Services performed in order or sequence set
Persons told to perform work in a certain sequence generally are considered employees.
- Oral or written reports
Employees are more likely to be required to submit regular reports to the employer.
- Payment by hour, week, month
Typically, employees are paid on a regular basis, while independent contractors are compensated by the job or on a lump-sum or straight commission basis.
- Payment of business and/or travel expenses
Employer payments of a person's work-related travel expenses generally indicates employee status.
- Furnishing of tools and materials
Employees, not individual contractors, are generally provided with supplies.
- Significant investment
Individuals who have a significant personal investment in the facilities they use for work are normally independent contractors.
- Realization of profit or loss
Unlike employees, independent contractors realize a profit or loss based on their success in performing a service.
- Working for more than one firm at a time
Individuals who perform services for a number of employers are usually independent contractors.
- Making services available to the general public
Individuals who regularly make their services available to the general public are usually treated as independent contractors.
- Right to discharge
Employees can be fired, while independent contractors cannot be discharged if they fulfill contract specifications.
- Right to terminate relationship without incurring liability
An employee can terminate his employment relationship with his employer at any time, whereas an independent contractor may be liable for breach of contract for leaving work unfinished.
Salary, Stipends and Fringe Benefits
The large majority of sponsored project funds are expended in support of personnel. Personnel support is of two major types
- salaries and wages which are paid to employees
- stipends which are paid to fellows
Employees are understood to engage in defined project related tasks and have job titles and job descriptions for which they receive salaries and wages (and are issued W2 forms summarizing their earnings at the end of each calendar year). In accordance with their titles and levels of effort, they may be eligible for fringe benefits. The Research Foundation manages its fringe benefits through a pool. The pool recognizes defined major classes of employees with associated fringe benefit rates. The rates are subject to negotiation and approval by the U.S. Department of Health and Human Services as part of the process by which indirect cost rates are determined. The rates are re-evaluated each RF fiscal year (RF fiscal years run from July 1 to June 30).
Fringe benefit costs are extracted from sponsored projects at the appropriate rate applied to salaries paid independent of an employee's eligibility to receive them.
Fellows are not employees. While Fellows may contribute significantly to sponsored projects, they are understood to be trainees and their support is not for services rendered. They receive stipends as opposed to salaries and wages. Fellows are issued 1099 forms rather than W2 forms at the end of the calendar year. The taxability of their stipends is governed by a complex collection of principles and rulings by the IRS. Fellows receive no fringe benefits by virtue of their appointment, and no fringe benefits are extracted from the sponsored projects which provide their stipends.
For additional information, see the Fellowship Quickguide.
Three-Month Summer Salary on Research Grants
During the time in which faculty have no academic obligation (typically a defined three-month period during the summer), they are eligible to receive their entire salary from sponsored projects (subject to sponsor constraints - e.g., NSF limits salary from its grants to a total of 2/9ths of the academic year salary in any one year period, including summer). Since they receive no State salary during that period, the salary offset mechanism does not apply.
During the summer, academic year faculty become direct employees of The Research Foundation. The result is that they become employees of two separate organizations, each of which has all of the obligations of an employer. This includes the collection of taxes such as Social Security and Medicare from all salaries paid. At the end of the calendar year, such individuals receive W2 forms from both the State and The Research Foundation. For some individuals, the combined Social Security payments will exceed the social security maximum. The excess beyond that maximum can be applied to Federal Income taxes.
PROCEDURE AND FORMS
Summer salary requests only require the approval of the relevant Chair and Dean. Requests for three-months summer salary require two forms:
- Three-Month Summer Salary Request Form
- Employee Appointment Form (to be
used if never on RF Payroll or if more than one year has elapsed since your last RF paycheck)
Employee Change Form (to be used if returning to RF Payroll within one year of you last RF paycheck)
Requests bearing the indicated approvals will be processed by the Office of Grants Management, provided that the expenditure is allowable by the sponsor and sufficient funds are available in the award. If questions arise after submission of the forms, the Office of Grants Management will contact the faculty member directly.