Stipend Questions
Melanie
37 Posts
I am the HR Director for our agency Head Start programs.
In the past we used the children's parents as volunteer bus monitors. Unfortunately, over the years, the parents have started refusing to monitor, or agree to monitor but don't show up. As an incentive, we have decided to offer a daily stipend of $24/day for "bus monitoring". I've spent the last 48 hours trying to research all the laws/rules that regulate stipends and I am still unsure of how to make sure we are doing everything legally. The closest I've come to finding applicable laws was 29CFR553.106. That says that stipends are allowed as long as they are not a substitue for wages, etc, and another article I read said that the government didn't want impede charities ability to get volunteers and tried not to make too many restrictions on volunteering, however, most of the stuff I have read has not given me clear guidance on the stipend rules, such as I am unsure of how to determine that we weren't substituting for wages. Also, it seemed to imply that we could not direct these volunteers regarding # of hours to get the stipend, and yet, it wouldn't seem fair to give the $24/day stipend to a person who only volunteers one hour.
Any advice?
In the past we used the children's parents as volunteer bus monitors. Unfortunately, over the years, the parents have started refusing to monitor, or agree to monitor but don't show up. As an incentive, we have decided to offer a daily stipend of $24/day for "bus monitoring". I've spent the last 48 hours trying to research all the laws/rules that regulate stipends and I am still unsure of how to make sure we are doing everything legally. The closest I've come to finding applicable laws was 29CFR553.106. That says that stipends are allowed as long as they are not a substitue for wages, etc, and another article I read said that the government didn't want impede charities ability to get volunteers and tried not to make too many restrictions on volunteering, however, most of the stuff I have read has not given me clear guidance on the stipend rules, such as I am unsure of how to determine that we weren't substituting for wages. Also, it seemed to imply that we could not direct these volunteers regarding # of hours to get the stipend, and yet, it wouldn't seem fair to give the $24/day stipend to a person who only volunteers one hour.
Any advice?
Comments
The site and quote below are from the IRS FAX's regarding stipends.
[url]http://www.irs.gov/govt/tribes/article/0,,id=135046,00.html[/url]
"Is the income from a stipend reported and, if so, how is it reported?
A stipend is defined as a fixed sum of money paid periodically for services or to defray expenses. The fact that remuneration is termed a “fee” or “stipend” rather than salary or wages is immaterial. Wages are generally subject to employment taxes and should be reported on Form W-2. Refer to Publication 15, Circular E, Employer’s Tax Guide, section 5, Wages and Other Compensation, for rules on accountable and nonaccountable plans for employee business expenses."
Just about the only thing that may help you is that any payments below $600 do not have to be reported by you on a 1099. That does not mean they are not taxable to the recipient, it just means you don't have to report it.