Human Resources

Human Resources

Home > International Tax > Human Subject Payments & Taxation

Human Subject Payments & Taxation

With the exception of non-Vanderbilt University Medical Center sponsored persons in H-1B status, international persons can receive a gratuity for participation in clinical or research studies. Participants are not employees of Vanderbilt University Medical Center but are considered to be independent contractors for the purpose of receiving the monetary gratuity or gift. 

Miscellaneous payments represent a broad category and, for Vanderbilt University Medical Center purposes, include prizes, awards, payments for human subject/participants in clinical trials and research studies. Almost all miscellaneous payments will require 30% tax withholding for international persons. In addition, tax treaty benefits rarely apply to miscellaneous payments.

Payments to international persons that are categorized as prizes, awards, or for participation is research studies or clinical trials are taxable. A Glacier Record will be created for these payments so a yearly 1042-S tax form can be issued.

Note: Persons in H-1B status are not permitted to receive compensation for services from any party except the H-1B sponsor.  A Vanderbilt University Medical Center sponsored H-1B employee can participate in research or clinical studies and receive compensation. However, a person in H-1B status, who is not sponsored by Vanderbilt University Medical Center, cannot receive compensation from Vanderbilt University Medical Center for participating in research or clinical studies. 

ITO recognizes that many participants in clinical trials or research studies will receive very small payments, and normally payments under $30.00. Under IRS regulations, no matter how small the payment, if the payment is subject to taxation, Vanderbilt University Medical Center is required to withhold taxes, usually at a 30 percent tax withholding rate. 

If the department wishes to have the international individual receive the face value of the payment, regardless of the tax, then a request to have the payment "grossed up" must be made. The department needs only to write "GROSS UP" in a prominent place on the check request form.