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Payments to Human Subjects

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Overview

IRB

Individuals who take part in University research studies often receive payment for their involvement as human subjects. The Institutional Review Board (IRB) reviews and approves proposed payments for anyone participating in human subject research as part of the protocol review process. The process for paying research participants depends on the circumstances of the study, method in which you are distributing funds and the amount of the payment.

Types of Payments to Human Subjects

Compensation is the payment to a human subject for their time and effort for participating in a study and can be in the form of a UCSD issued check, cash, gift card, scrip. Compensation is subject to IRS income reporting and all forms are considered compensation (as the type of payment does not determine IRS filing requirement). 

Reimbursement is the payment to a human subject to claim out-of-pocket expenses incurred as a result of participating in a study such as study-related travel, gas, non-business mileage (medical/move rate), lodging, and meals.[1] Reimbursement can be in the form of a check or ACH. As approved on a study-by-study basis, airfare expenses can be prepaid by UCSD Travel (airfare only) rather than requiring reimbursement. US Citizens and Resident Aliens’ reimbursement for out-of-pocket expenses are not subject to IRS income reporting. Non Resident Alien reimbursements for out-of-pocket expense are reportable to the IRS, please refer to the Non Resident Alien section under the Income Tax Reporting Requirements tab below.

Method of Payments

The following options are available for Trial Administrators:

Use this matrix to decide on the best approach for making a Human Subject payment:

 (click the image for a larger view)

human-subject-matrix


[1] Mileage expenses are paid at the medical rate of 23 cents/mile.

Policy Statement/Considerations

Institution Review Board (IRB)

Research at UCSD using a human subject must be approved by the Institutional Review Board (IRB) which is an independent committee that protects the rights and well-being of research subjects. As part of the protocol and informed consent process, the IRB reviews all aspects of compensation and reimbursement made to a human subject including amount, proposed distribution method, timing, and if a human subject is either a UCSD student or employee.

The IRB’s approval is limited to the payment and protection of a human subject. The IRB does not have the authority to override IRS/UCSD policy. If there is a need to have a human subject paid in a manner inconsistent with UCSD policies and procedures, contact the Disbursements Human Subjects Administrator to ascertain if an exception can be made.

Before payment can be initiated, Principal investigators must renew their IRB approvals annually. The continuation of research after expiration of IRB approval is a violation of the regulations [21 CFR 56.103(a)]. If the IRB has not reviewed and approved a research study by the study’s current expiration date, i.e., IRB approval has expired, research activities should stop. No new subjects may be enrolled in the study.

Confidential Subject Information

On occasion an investigator might feel that it is a breach of a research subject’s privacy to collect their SSN/ITIN; however, UCSD is obligated by law to collect and report a human subjects’ income. The IRS receives the recipient’s name, identification number, street address and total income from UCSD. The information provided to the IRS neither identifies the recipient as a study participant nor the purpose of the payment.

As there are privacy and confidentiality issues, the department is responsible for maintaining a human subjects’ information. As the W-9 contains the person’s SSN/ITIN and other potentially sensitive data, it should be protected. The best way to safeguard sensitive data is to securely transmit the W-9 to Disbursements and not retain a copy in the departmental file.  

Accounting for Payments

Review the current practice of expensing up-front purchases (scrip/cards) for a federally sponsored study as most awards indicate that these costs can only be expended to federally funded studies once payment has been distributed to the human subject.

Clinical Trial Payment Coordinator Responsibilities

Review the Clinical Trial Payment Coordinator Responsibilities document.

Income Tax Reporting Requirements

To fulfill UCSD’s tax reporting responsibilities, UCSD is required to obtain the subject's SSN if they will be paid $600 or more in a calendar year to report compensation on IRS Form 1099-MISC. If cumulative payments to a human subject will total $600 or more in one calendar year, the first payment of the calendar year will require a W-9 for U.S. Citizens and Resident Aliens.

Human subject participants should consult with their tax advisor regarding reporting requirements.

Compensation to human subjects who are UCSD employees is subject to the procedures and payment will be reported on Form W-2.

Non Resident Alien

All Non Resident Aliens receiving cumulative payments of $100 or more in a calendar year must be paid via direct payment. Human subject participants will be providing income tax information including visa information and a valid ITIN (Individual Tax Identification Number) or SSN through Glacier prior to first payment. (link)

Tax identification is not necessary for one time payments given cash, scrip, and gift cards under $100 in one calendar year. If small multiple payments are being distributed to a Non Resident Alien by means of cash and equivalents which cumulate $100 in one calendar year, further documentation is required as noted above.

Compensation in Confidential Studies

In certain circumstances, research studies are performed in which the privacy of the subject must be protected and the confidentiality of the data[1] maintained. If the study has been determined to be confidential, the procedures for cash, gift cards, scrip and other non-checks are as follows as these forms of compensation can be processed for up to $600 to any one subject in a calendar year:

  • Because the study is confidential, it is unnecessary to identify the name of the subject as is for non-confidential studies; an identifying code must be assigned to each subject
  • A listing of these codes, along with the dollar amounts paid to each must be attached to (Certification of Cash Payment to Human Subjects)
  • A cross-reference of the coded identification, including the subject’s name, amount received, and date, must be maintained by the Principal Investigator for a period of three years following the submission of the final financial report, unless the terms of the award provide for a different period
  • This information is required to be available upon the request of internal/external and the Internal Revenue Service (IRS)

Total payments to any one subject during the course of a study totaling $600 or more in a calendar year must be paid via direct payment, issued in the form of a check or ACH. Information required for these payments include the subject's name, address, and SSN (submit W-9). This information will be reported to the IRS, and Form 1099-MISC, will be sent to the payee at the end of the calendar year in which the payment(s) were made.


[1] The investigator maintains the confidentiality of the data as this is not required by the IRS.

Forms

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