Advances
µÛÍõ»áËù offers three types of advances to employees and students. These funds may be requested to pay for business needs upfront and substantiate them after the issuance or travel event.
Types of Advances
Research Advance
A researcher may request an advance of cash to pay research subjects directly. Purchase of gift cards to distribute in lieu of cash is still treated as a cash payment and are subject to the same restrictions as if cash was being paid. Payments to human/research subjects of $600 or more in a calendar year will be reported to the IRS as taxable income, and the recipient will receive a 1099-MISC form.
For more information on purchasing gift cards, please refer to the Purchasing Gift Cards webpage.
Requesting a Research Advance:
To request a research advance the researcher must fill out the Research Advance Details section of the Advance Request Form. The form must be signed by both the researcher and the planning unit CFAO. Upon completion of the form, the form must be submitted to Finance on a Payment Request form in BobcatBUY. Research advances must be submitted to Finance no later than 10 days in advance of the need for funds. The below guidelines apply on all research advances:
- Advances given to employees can not extend beyond 12 months on an operating or foundation account.
- Advances given to employees or students can not extend beyond 3 months on an externally sponsored grant or award account.
- Advances given to students can not extend beyond the academic term in which it is received.
Substantiating a Research Advance:
All research advances must be substantiated within 15 days of the end date that is referenced on the original research advance form. Completed forms should be emailed to accounts.payable@ohio.edu.
Documentation needed to substantiate the advance include:
- Research Advance Substantiation form, signed by both the researcher and the planning unit CFAO.
- Form can be found on the third tab of the Advance Request Form
- Payment Receipt from the Bursar office for any returned funds.
- Participant name, email, and amount given to each participant.
- Forms can be found on the bottom tabs of the Advance Request form to help researchers complete this requirement.
- Identify any participants who are foreign nationals. (See the Foreign Nationals section below.)
- Participant signature indicating acceptance of payment.
- If e-gift cards are given out, many platforms offer a report that shows when the gift cards are opened by the recipient. This report can be used as a replacement for the signature requirement. If the platform you are using does not include a report like this, you must provide an actual signature from the recipient or copies of an email from the recipient of the e-gift card with their name, their email address, the amount received, and their acceptance of the e-gift card.
- IRS Form W9 or W8 – For any participant receiving over $100 is required – regardless of whether it is cash or a cash equivalent.
- Each PI is required to maintain a list of any participant that receives cash or a cash equivalent (ex. gift cards, prepaid credit card, e-gift cards, etc.), regardless of dollar amount (even if less than $100). If the University is audited by the IRS, the PI will be required to provide this list for audit by the IRS.
Travel and Program Advances
An employee can request a travel advance only when traveling with a group of students or when traveling internationally for more than 14 calendar days. Only one advance will be approved per employee at a time, and they will not be issued more than 7 days in advance of the travel date. Students are also eligible to request travel advances when traveling for a university business purpose.
Requesting a Travel/Program Advance:
To request a travel advance the traveler must fill out the Program & Travel Advance details on the Advance Request Form. The form must be signed by both the employee or student receiving the advance, and the planning unit CFAO. For faculty traveling with a group of students, documentation including a list of student names and itemization of costs must accompany the form. Upon completion of the form and documentation, the form must be submitted to Finance on a Payment Request form in BobcatBUY. The advance must be submitted to Finance 10 days prior to the date of travel.
Substantiating a Travel/Program Advance:
All Travel advances must be substantiated with 15 days of the end date of travel. Employees must substantiate Travel Advances in the University’s expense management platform, . Below are QRGs to help guide employees through this process.
Students without access to Concur must submit the Travel Advance Substantiation form, found on the third tab of the Advance Request form, signed by both the traveler and the planning unit CFAO. Completed forms should be emailed to accounts.payable@ohio.edu.
Documentation needed to substantiate the advance include:
- Concur Expense Report or paper advance substantiation form detailing how the advance was used.
- Payment Receipt from the Bursar office for any returned funds.
- Detailed documentation of student per diem (if applicable) with signatures from the students acknowledging receipt of the funds.
- Any itemized receipts for expenses other than IRS per diem or mileage rates.
- An itemized receipt is defined as an invoice, cash register receipt, sales slip, or packing slip which contains the following information.
- Business/Vendor Name
- Location
- Date of Purchase
- Description of items purchased
- Price of each item purchased
- Total amount of purchase
- Method of Payment
- An itemized receipt is defined as an invoice, cash register receipt, sales slip, or packing slip which contains the following information.
- Documentation supporting the business purpose of the trip.
- Trip Itinerary
- Roster (if applicable)
Tax Treatment of Advances
Failure to comply with any of the steps above could result in all payments being reported as taxable income to the recipient.
Foreign Nationals
- Payments to Research Subjects
All payments, whether in cash or cash equivalent, regardless of the dollar amount, are subject to the IRS withholding and reporting requirements when foreign national research subjects are determined to be nonresident aliens for tax purposes.
In general, the withholding rate is 30%, which needs to be withheld at the time of the payment by the department. When cash equivalents, such as gift cards, are given instead of cash payments, the University is still required to comply with the withholding and reporting requirements, and, therefore, the department will be responsible for paying the withholding taxes by grossing up the withholding taxes which will be at the rate of 42.86%. For example, if a foreign national research participant who is a nonresident alien for tax purposes is being compensated $70 for participating in a research focus group, the department will need to remit $30 (42.86% of $70) to account for the withholding taxes.
Prior to engaging any foreign nationals in research, the department needs to request that the foreign nationals contact (a) the Tax Department, tax@ohio.edu, with the expected research subject payment information, to determine their tax status and tax consequences, and (b) the Office of International Student and Scholar Services, isss@ohio.edu, to ensure that they are in compliance with their immigration requirements as well, if applicable.
- Travel Advance to Foreign National Students
When foreign national students who are nonresident aliens for tax purposes fail to comply with the travel advance policy, specific tax consequences will need to be examined based on individual situations to satisfy any applicable withholding and reporting obligations.