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.

$3,000.00	Total compensation amount minus
(213.19)	FICA/MDCR withholding ($3,000 minus [$3,000 divided by 1.0765]
$2,786.81	Net amount for student wages/stipend, housing and meals

Note:

1. 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.
     
2. Students should be "on their own" for purchasing meals, though the Principal Investigator May arrange for favorable on-campus meal rates.