Under Treasury Regulation Section 1.119-1, the payments Davidson College makes to students for grant-related work, including salary/stipends, housing and meals, are taxable to the student, and are subject to Federal, State and FICA/MDCR (FICA and Medicare) withholding from the student. In addition, unless separately funded by the grant, the College’s matching contribution for FICA/MDCR of 7.65 percent must be deducted from the total compensation amount per student before setting the amount available for salary/stipend, housing and meals.
Example (actual amounts for housing and meals may differ):
Grant A has $3,000 per student for summer compensation and FICA/MDCR is not separately funded.
Total compensation amount minus
($3,000 minus [$3,000 divided by 1.0765]
|Net amount for student wages/stipend, housing and meals|
- In order to simplify the administration of the grants, pro-rata costs for on-campus housing may be deducted from the student’s pay. Please contact Rene Baker to establish this deduction.
- Students should be "on their own" for purchasing meals, though the Principal Investigator May arrange for favorable on-campus meal rates.