Payment of Incentives to Research Participants

• PIR (Payment to Individual Report)
• Research Participant Incentive Payment Log
• IRS Form W-9
• IRS Form W-8BEN

Incentive payments are low value payments or items given to individuals to encourage them to participate in research. In order to be an incentive, the value of a payment or item must be minimal and should be provided to all participants in the research project, regardless of whether they complete the activity. Incentive payments include small dollar items, cash, checks, or gift cards depending on the specifics of the individual research project. Drawings, raffles, and other “chance to win” offers may also be used as an incentive, but a Principal Investigator (PI) should consult with the Office of Research & Sponsored Programs to determine allowability.

Incentives must first and foremost conform to what is approved in a research project’s IRB protocols. Incentives may take a variety of forms depending upon the nature of the research project:

• No value items: Items of no cost to the university provided by third-party vendors (e.g., coupons, admission tickets, tokens)

• Small value items: Tangible item of little value, typically less than $10 per item (e.g., t-shirts, pens, keychains, books, DVDs, souvenirs)

• Cash payments: Cash paid to participants

• Please refer to the specific procedural requirements below for cash payments. Requirements vary according to whether participants are US tax residents or non-resident aliens, whether the cash payment is less or more than $50, and the total value of all cash payments made to a participant during a calendar year.

• Gift cards or certificates: Gift cards/certificates given to participants valued at under $50

• Note: Procurement cards cannot be used to purchased gift cards or certificates.

• “Chance to win” incentives: Entries into a drawing/raffle/lottery to win something

• “Chance to win” incentives may not be allowable, depending upon the research project’s source of funding. Before drawings, raffles, or other “chance to win” offers are used as incentives, a PI should consult with the Office of Research & Sponsored Programs to determine allowability, for example GPR and 131 funds cannot be used for this purpose.

In order to comply with IRS tax reporting regulations, there are different procedural requirements for incentive payments made to participants contingent upon whether they are US tax residents or non-resident aliens (NRAs). (Please refer to the question below about procedures for more information about these requirements.)

US tax resident: A person who is subject to US tax reporting rules, including:

• US citizens

• US permanent residents

• US resident aliens

Non-resident alien (NRA): A person who is a citizen of any country other than the US and does not otherwise meet the definition of a US tax resident

PIs have an obligation to ask if a reasonable person would believe that the participant could be an NRA (e.g., an exchange student, a visiting scholar). Additionally, you cannot unknow what is known to you about a participant. For example, if you know that Sam is an exchange student from Poland, and Sam agrees to participate in your study, you must treat Sam as an NRA.

• No value items: Items of no cost to the university provided by third-party vendors (e.g., coupons, admission tickets, tokens)

• Small value items: Tangible item of little value, typically less than $10 per item (e.g., t-shirts, pens, keychains, books, DVDs, souvenirs). The total value of all items received must be less than $10.

Small value items:

1. Small value items (tangible items, typically less than $10 per item in value) can be purchased with a university procurement card.

2. Itemized purchase receipt(s) should be submitted with the procurement card statement according to procurement card policy.

Single cash payment or gift card under $50 made to US tax resident:

1. Complete a PIR and supporting documentation, requesting a check to be issued to the PI.

   • Note: Procurement cards cannot be used to purchased gift cards or certificates.

2. Use the check to obtain cash or purchase gift cards.

3. Complete the Research Participant Incentive Payment Log as cash or gift card incentives are distributed.

4. Once incentives are distributed, submit the completed log and gift card receipt (if applicable) to Business Services. If not all incentives are distributed, also include a check made payable to UWL in the amount of undistributed cash and/or gift cards.

5. Funds requested for incentives are expected to be distributed within 90 days. If your study will be over a longer time period, you may need to submit multiple PIRs.

Single check payment of $50 or more made to US tax resident:

1. The PI is responsible for having the participant complete an IRS Form W-9.

2. Complete a PIR requesting a check to be issued to the participant.

3. A university check is given to the PI for distribution.

4. Complete a Research Participant Incentive Payment Log as incentive checks are distributed.

5. Submit completed log and any undistributed checks (if applicable) to Business Services.

6. Funds requested for incentives are expected to be distributed within 90 days.

Any payment made to non-resident alien (NRA):

1. The PI is responsible for having the participant complete an IRS Form W-8BEN.

2. Complete a PIR requesting a check to be issued to the participant.

3. A university check is given to the PI for distribution.

4. Complete a Research Participant Incentive Payment Log as incentive checks are distributed.

5. Submit completed log and any undistributed checks (if applicable) to Business Services.

6. Funds requested for incentives are expected to be distributed within 90 days.

Submit the following documentation with a PIR:

1. IRB approval letter

2. Approved research budget and budget justification

3. Award letter

Submit the following documentation with a procurement card statement:

1. IRB approval letter

2. Approved research budget and budget justification

3. Award letter

Submit the following documentation after distributions of cash, gift cards, or checks is completed:

• A completed Research Participant Incentive Payment Log

• A check made out to UW-La Crosse for any undistributed cash or gift cards

• Undistributed checks

1. Itemized purchase receipt(s)

For documentation purposes, it is generally recommended that internal funds be used to purchase non-cash incentives (e.g., gift cards, small value items).

Generally, payments under $50 can be made by cash or gift card and do not require the collection of a participant’s tax information, while payments of $50 or more must be made by university check and require the prior  collection of a participant’s tax information via a W-9 or W-8BEN form by the PI. Contact the Accounts Payable manager for assistance in obtaining blank forms.

Note: students may NOT collect, view, handle, or be in possession of W-9 and W-8BEN forms for research participants. NO EXCEPTIONS. If a PI requires assistance to obtain or appropriately secure this information, another UWL employee, who is not a student, may assist even if they are not otherwise attached to the project.

For participants who are US tax residents, if the PI is providing a single payment, cash or gift card, of $50 or more OR is aware that incentive payments to an individual are likely to total $600 or more during a calendar year, the PI must have the participant complete an IRS Form W-9. Payments must be reported by the individual to the IRS (on IRS Form 1099-MISC in Box 3, Other Income).

For participants who are non-resident aliens (NRAs), the PI must have the participant complete an IRS Form W-8BEN regardless of the total incentive payments that may be made to the individual. Payments must be reported by the individual to the IRS (on Form 1042-S) and could be subject to 30% federal income tax withholding.

Contact the Office of Research & Sponsored Programs for a consultation.

The informed consent and any applicable HIPAA documents required for use in a research project do not need to describe the collection of information needed for tax reporting when that information is solely used to process incentive payments.

There are additional considerations for projects conducted by undergraduate and graduate students who are funded by UWL Undergraduate Research & Creativity (URC) or Graduate Research, Service, & Educational Leadership (RSEL) grants.  Please see the section for students below for additional information.

The use of incentives should be justified by the ability to recruit participants and the amount of effort required by participants. Research participants are not to be paid as an employee, and therefore no reference should be made to hourly rates, payments per hour, minimum wage, or reimbursements per IRS regulations.

• Graduate students - Research, Service, & Educational Leadership (RSEL) grants
• Undergraduate students - Undergraduate Research & Creativity (URC) grants

• RSEL grants (graduate students): Yes, but both the total amount and the amount given to each individual participant must be well justified in your proposal.

• URC grants (undergraduate students): Yes, but both the total amount and the amount given to each individual participant must be well justified in your proposal. 

Incentive payments are low value payments or items given to individuals to encourage them to participate in research. In order to be an incentive, the value of a payment or item must be minimal and should be provided to all participants in the research project, regardless of whether they complete the activity. Incentive payments include small dollar items, cash, checks, or gift cards depending on the specifics of the individual research project.

Incentives must first and foremost conform to what is approved in a research project’s IRB protocols. Incentives may take a variety of forms depending upon the nature of the research project:

• No value items: Items of no cost to the university provided by third-party vendors (e.g., coupons, admission tickets, tokens)

• Small value items: Tangible item of little value, typically less than $10 per item (e.g., t-shirts, pens, keychains, books, DVDs, souvenirs)

• Cash payments: Cash paid to participants

• Please refer to the specific procedural requirements below for cash payments. Requirements vary according to whether participants are US tax residents or non-resident aliens, whether the cash payment is less or more than $50, and the total value of all cash payments made to a participant during a calendar year.

• Gift cards or certificates: Gift cards/certificates given to participants valued at under $50

• Note: Procurement cards cannot be used to purchased gift cards or certificates.

• “Chance to win” incentives: Entries into a drawing/raffle/lottery to win something

“Chance to win” incentives may not be allowable, depending upon the research project’s source of funding. RSEL and URC funding cannot be used to purchase “chance to win” incentives.

In order to comply with IRS tax reporting regulations, there are different procedural requirements for incentive payments made to participants contingent upon whether they are US tax residents or non-resident aliens (NRAs). (Please refer to the question below about procedures for more information about these requirements.)

US tax resident: A person who is subject to US tax reporting rules, including:

• US citizens

• US permanent residents

• US resident aliens

Non-resident alien (NRA): A person who is a citizen of any country other than the US and does not otherwise meet the definition of a US tax resident

PIs have an obligation to ask if a reasonable person would believe that the participant could be an NRA (e.g., an exchange student, a visiting scholar). Additionally, you cannot unknow what is known to you about a participant. For example, if you know that Sam is an exchange student from Poland, and Sam agrees to participate in your study, you must treat Sam as an NRA.

• No value items: Items of no cost to the university provided by third-party vendors (e.g., coupons, admission tickets, tokens)

• Small value items: Tangible item of little value, typically less than $10 per item (e.g., t-shirts, pens, keychains, books, DVDs, souvenirs). The total value of all items received must be less than $10.

Small value items:

1. Contact your department’s ADA for assistance. They may be able to purchase them for you.

2. If you are asked to purchase the items and seek reimbursement, your ADA will need an itemized purchase receipt(s) for you to be reimbursed.

Single cash payment or gift card under $50 made to US tax resident:

1. Contact your department’s ADA for assistance.

2. They can assist you with completing a PIR and providing the supporting documentation to request a check to be issued to you.

3. Use the check to obtain cash or purchase gift cards.

   • Note: Procurement cards cannot be used to purchased gift cards or certificates.

4. Complete the Research Participant Incentive Payment Log as cash or gift card incentives are distributed.

5. Once incentives are distributed, submit the completed log and gift card receipt (if applicable) to your ADA, who will return it to Business Services. If not all incentives are distributed, also include a check made payable to UWL in the amount of undistributed cash and/or gift cards.

6. Funds requested for incentives are expected to be distributed within 90 days. If your study will be over a longer time period, you may need to submit multiple PIRs.

Single check payment of $50 or more made to US tax resident:

Note: This type of incentive would be unusual for a student project.

1. Contact your department’s ADA for assistance.

2. Your faculty mentor will be responsible for having the participant complete an IRS Form W-9. As a student researcher, you may not collect W-9 forms. The completion and collection of these forms must be done by a faculty member or your department’s ADA.

3. The ADA or your faculty mentor will complete a PIR requesting a check to be issued to each of the participants.

4. A university check will be given to you for distribution.

5. Complete a Research Participant Incentive Payment Log as incentive checks are distributed.

6. Once the checks are distributed, submit the completed log and any undistributed checks (if applicable) to your ADA, who will return it to Business Services.

7. Funds requested for incentives are expected to be distributed within 90 days.

Any payment made to non-resident alien (NRA):

1. Contact your department’s ADA for assistance.

2. Your faculty mentor will be responsible for having the participant complete an IRS Form W-8BEN. As a student researcher, you may not collect W-8BEN forms. The completion and collection of these forms must be done by a faculty member or your department’s ADA.

3. The ADA or your faculty mentor will complete a PIR requesting a check to be issued to the participant.

4. A university check will be given to you for distribution.

5. Complete a Research Participant Incentive Payment Log as incentive checks are distributed.

6. Once the checks are distributed, submit the completed log and any undistributed checks (if applicable) to your ADA, who will return it to Business Services.

7. Funds requested for incentives are expected to be distributed within 90 days.

Submit the following documentation with a PIR:

• IRB approval letter

• Approved research budget and budget justification

• Grant award letter

• Copy of your grant acceptance form, if applicable

Submit the following documentation for the purchase of small value items:

• IRB approval letter

• Approved research budget and budget justification

• Grant award letter

• Itemized purchase receipt(s) - if you make the purchase

Submit the following documentation after distributions of cash, gift cards, or checks is completed:

• A completed Research Participant Incentive Payment Log

• A check made out to UW-La Crosse for any undistributed cash or gift cards

• Undistributed checks

For documentation purposes, it is generally recommended that internal funds be used to purchase non-cash incentives (e.g., gift cards, small value items).

Generally, payments under $50 can be made by cash or gift card and do not require the collection of a participant’s tax information, while payments of $50 or more must be made by university check and require the prior collection of a participant’s tax information by your faculty mentor or department’s ADA.

For participants who are US tax residents, if you or your faculty mentor are aware that incentive payments to an individual are likely to total $600 or more during a calendar year, your faculty mentor or department’s ADA must have the participant complete an IRS Form W-9. Payments must be reported by the individual to the IRS (on IRS Form 1099-MISC in Box 3, Other Income).

For participants who are non-resident aliens (NRAs), your faculty mentor or department’s ADA must have the participant complete an IRS Form W-8BEN regardless of the total incentive payments that may be made to the individual. Payments must be reported by the individual to the IRS (on Form 1042-S) and could be subject to 30% federal income tax withholding.

This is unlikely to be allowed for a student research project. If approved by IRB, contact the Office of Research & Sponsored Programs for assistance.

The informed consent and any applicable HIPAA documents required for use in a research project do not need to describe the collection of information needed for tax reporting when that information is solely used to process incentive payments.

• IRB approval letters, budgets and/or budget justifications, or grant award letters that are missing will delay the processing of your reimbursement.

• Receipts that are missing will cause your reimbursement to be denied.

• Missing Research Participant Incentive Payment Logs, reimbursement to the university for undistributed cash or gift cards, or undistributed checks will create a financial obligation for which you will need to reimburse the university.

For IRB approval letters, budgets and/or budget justifications, or grant award letters:

• First, check your emails. You should have emails with your IRB approval letter and grant award letter.

• Second, check with the office to which you submitted your IRB protocol or grant proposal.

Receipts:

• Check with the vendor or store to see if you can obtain a duplicate receipt.

Research Participant Incentive Payment Logs, cash, gift cards, and checks:

• All of these items should be kept safe and secured at all times.

• Keep an electronic copy of your grant proposal. (URC applicants should download a copy of the final version of their proposal before the submission window closes.)

• Keep a copy of your IRB approval letter. Note: Federal IRB requirements state that you, as the PI, should keep the approval letter for 3 years following the end of your study.

• Grant award letters are your access to your grant funds. Be sure to keep the email in a file where you can locate it easily.

• Receipts should be treated like cash. Without the receipt, you will not get reimbursed.

• Research Participant Incentive Payment Logs are your proof that you distributed the cash, gift cards, or checks as you stated you would. If you must carry it with you, make frequent copies or scans in case it is lost.

• Cash, gift cards, and undistributed checks should all be treated like cash. Keep them safe and secure at all times. Your ADA or faculty mentor may be able to hold them in a locked cabinet or drawer, and then you can access them on an as needed basis.

The use of incentives should be justified by the ability to recruit participants and the amount of effort required by participants. Research participants are not to be paid as an employee, and therefore no reference should be made to hourly rates, payments per hour, minimum wage, or reimbursements per IRS regulations.