Human Subject Payments (Sponsored Programs, Post Award)

1. Purpose

Boston University often conducts research projects that involve the use of individuals (“Human Subjects”). Payments to Human Subjects may be paid in the form of check, petty cash, or gift cards depending on the circumstances of the study and the dollar amounts involved.

In order to fulfill the University’s tax reporting responsibilities with the Internal Revenue Service (IRS), the University is obligated to obtain certain required information from the Human Subject if he / she will be paid $600 or more in a calendar year and to report these payments on Form 1099-MISC, Miscellaneous Income. The University is not required to report payments that total less than $600 paid to each Human Subject in a calendar year via a 1099 to the Human Subject or the Internal Revenue Service.

2. Covered Parties

This policy applies to all Principal Investigators (PI) and any other individual conducting research that involves monetary remuneration to Human Subjects.  Note that for the purposes of this procedure, remuneration primarily relates to compensation to an individual for study participation and not out-of-pocket expenses that may be reimbursed to facilitate study participation.

3. University Policy

The University will fulfill all of its legal and ethical obligations with respect to the payment of monetary remuneration to Human Subjects.

The Institutional Review Board (IRB) is responsible for the protection of the rights and welfare of Human Subjects. As part of their responsibilities, if remuneration is proposed to be paid to Human Subjects, the IRB will determine whether the remuneration is acceptable and the manner and content of the related information to be provided to the Human Subjects in connection with their informed consent to participate in the research study. In some cases, the study may be designed so as to provide maximum confidentiality protections to the Human Subjects, including restrictions on the retention of the Human Subject’s name and other identifying information, due to the unusually sensitive nature of the study (referred to as “confidential studies”).

Payments to Human Subjects, whether in the form of check, cash, or gift card, are taxable to the individual receiving the payment, no matter the amount of the payment.  If the cumulative amount of payments from all Boston University research studies (and other similar remuneration) in a calendar year is $600 or more, the cumulative amount will be reported to the IRS and to the Human Subject on a Form 1099-MISC, Miscellaneous Income.

The following information is currently required to be reported to the IRS for each Human Subject receiving remuneration of $600 or more in a calendar year:

• Full legal name
• Status as a U.S. citizen, permanent resident, or resident alien for U.S. tax purposes
• Social security number (SSN) or individual Taxpayer Identification Number
• Permanent legal address
• Mailing address (if different)

Except in the case of confidential studies, the preferred method of remuneration should be via check remitted directly to the research subject.  In the case of confidential studies, remuneration is typically via petty cash or gift cards. Please refer to section D for additional information regarding confidential studies.

4. Human Subject Payments Tracking Log

Regardless of the form of payment and type of study, the following information is required to be captured as part of the research record supporting payment to all Human Subjects:

• BU Grant Number / Sponsor / Sponsor Award Number
• Principal Investigator Name
• Date of study participation and remuneration
• Type of intervention, participation, interview, etc. with Human Subject for which remuneration is received (completion of survey, MRI, etc.);
• Type of disbursement (check, cash, gift card)
  • List out check number and/or gift card number if available
• Amount of disbursement
• Researcher disbursing payment
• Human Subject’s name (non-confidential studies) or identification number (confidential studies)
• IRB (HIC/HSC) protocol number

This log must be kept by the Department for audit purposes and must follow Sponsor retention rules.  In some cases the retention policy may be up to three years after the award is over.  If the department is unclear how long this log should be kept, please reach out to your PAFO Research Administrator.  An example log was created to help assist you with this process and can be found here.

In all cases, a Human Subject may decline to receive the remuneration that is offered, in which case the University will have no tax reporting obligations and no payment related information must be collected.

This policy applies to all Boston University research involving Human Subjects, both on and off-campus.  For issues related to remuneration for studies conducted outside of the United States, please consult with the Offices of Global Programs and / or the Comptroller.

Please note that regardless of the type of mechanism used for human subject payment, the general ledger code of 535200 should be used at all times.

A. Payments by Check

Total payments to any one Human Subject during the course of a (or multiple) study(ies) totaling $600 or more in a calendar year must be processed through Accounts Payable for payment to be issued in the form of a check using the Disbursement Request Form. The information required by the IRS must be inserted into this form. This information will be reported to the IRS, and Form 1099-MISC, Miscellaneous Income will be sent to the payee at the end of the calendar year in which the payment(s) were made.

Payments made to Human Subjects who are nonresident aliens must be paid by check and are reported on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding regardless of the dollar amount. All payments to nonresident alien Human Subjects must be processed through the Payroll Office and the procedure for paying an honorarium to non-resident alien Human Subjects must be followed.

Bulk Checks:

The Accounts Payable Department offers an additional service for those studies that have numerous study subjects who require payment in the form of check.  The following steps must be followed in order to use this service:

• Each department will have to register with the Accounts Payable Manager
• Once AP approves the department to use the service, the department designee will be sent an upload template with instructions
• Each department will have one designee to submit the payment uploads; this designee must be the department’s financial approver
• The department must send the payment request via secure mail (Data Motion)
• AP processes uploads once a week
• Once processed, checks will be mailed directly to each Human Subject

B. Payment by Cash

Payments to Human Subjects may be processed in the form of cash if the total payment to each Human Subject during the course of the study does not exceed $600 during a single calendar year. Studies in which the recipient is paid in cash must be done through the establishment of a petty cash fund used exclusively for the purpose of paying Human Subjects for a particular research study.  This petty cash fund can be requested using the Record of Petty Cash Disbursement and Request for Reimbursement.

For audit purposes, when using petty cash as a disbursement mechanism, a log must be tracked with the information as detailed in the Policy section 3 above.  An example of this log can be found here under the Cashier’s Office section. For Petty Cash reimbursement, Research Coordinators must fill out the Record of Petty Cash Disbursement and Request for Reimbursement.

The form must be signed by the PI or the PI’s designee, but to ensure a separation of duties, not the person who distributed the funds.  Payments to each Human Subject must be individually accounted for and reconciled on a monthly basis using the tracking information listed above.  The BU Petty Cash Policy lists that reconciliation and cash replenishment occur on a monthly basis.  By reconciling both the Petty Cash Account and Human Subject Payment Log, departments will ensure that each are in accordance with the other while also following BU policy.

Petty cash funds for Human Subjects are subject to all policies and procedures as described in one of two policies:  Petty Cash Policy (Charles River) or Petty Cash Policy (Medical Campus)

C. Payment by Gift Card

An alternative approach of cash payments to Human Subjects is through the usage of gift cards.  Gift cards are purchased through standard Sourcing and Procurement processes via Ariba Guided Buying using the National Gift Card e-catalog.    The purchase should not be made by the individual who is disbursing the cards to ensure a separation of duties. Best practice involves purchasing the gift cards from a University Cost Center and not directly from the Sponsored Account.  This ensures gift cards are charged accordingly to Sponsors and limits errors or misuse by Boston University.

Payments to each Human Subject by gift card must be individually accounted for and reconciled on a monthly basis.  A Card Reconciliation Tracking Tool was created to assist with this reconciliation and can be found here.

As gift cards are used, monthly reconciliations will be done in conjunction with Journal Entries, debiting the Sponsored Account and crediting the University Cost Center from which the purchase was made.  Journal Entries will be completed following standard practice found here and must include back up of the Reconciliation itself.  This reconciliation should be done with the individual who placed the order to ensure that all gift cards are accounted for.  This reconciliation should be done using guidance from the After-the-Fact review procedures that can be found here.

If at the end of a Study, there are extra Gift Cards that were purchased directly from the Grant and not from the University Cost Center, the total must be credited back to the grant.  It is perfectly acceptable for gift cards to be used on a different study, even if that Study is in a different Department.  However, a cost transfer must be done, relieving the Grant where the gift cards will not be used and charging the new Grant where they will be.

D. Confidential Studies

For confidential studies, the procedures for obtaining the funds for payment are the same as those described above.

Please take note of the following important considerations:

• Payments may not be made in the total amount of $600 or more to any Human Subject in a single calendar year unless arrangements are made to obtain the required information described above in the University Policy to enable the University to meet its tax reporting obligations.
• Provided the payments will not total $600 or more, it is not necessary to identify the Human Subject by name; however an identifying code or number must be assigned to each Human Subject being paid.
• A cross-reference list of the coded identification, including the Human Subject name, amount received, and date, must be maintained on file in a secured manner by the PI 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 auditors, Grants and Contracts auditors, and the IRS.

E. Payments to Boston University Employee Human Subjects (Including Student Employees)

Payments made to Human Subjects who are also employees of the University are subject to the procedures detailed in this policy.  Study payments to a University employee can be made by any of the methods described in this policy when the study activities are separate and distinct from the employee’s job duties.  Study payments to a University employee must be made through the Payroll system and included in the employee’s Form W-2, Wage and Tax Statement when the study activities are not separate and distinct from the employee’s job duties.  An example of a study that is not distinct would be a staff member whose job entails entering invoices into a system, take part in a study which reviews individuals as they enter invoices into a system to see if it causes arthritis.

F. Informed Consent Disclosure

The informed consent document for all studies that involve remuneration of $600 or more, including confidential studies, shall disclose these IRS compliance requirements in a manner approved by the IRB.  If identifiable information is sent to Central University departments (Accounts Payable, Post Award Financial Operations, etc), this too, must be disclosed in the consent form.

G. HIPAA and Data Privacy Laws

Boston University has a responsibility to protect the privacy and security of protected health information of individuals and other sensitive information such as SSNs in compliance with the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), Massachusetts General Laws Chapter 93H, and other laws. Boston University has adopted policies and procedures and has implemented other safeguards to control the creation, receipt, storage, transmission, disclosure and use of sensitive information. PIs must comply with all applicable privacy and security policies and procedures of Boston University/Boston Medical Center and complete all required training.

4. Responsible Parties

Responsible Parties

5. Related Policies and References

Check Deposit Procedures

Petty Cash Policies and Procedures – CRC

Petty Cash Policies and Procedures – MED

Boston University Medical Campus Institutional Review Board

Boston University Charles River Campus Institutional Review Board

After the Fact Review

Gift Card Reconciliation Tracking

Human Subjects Payment Tracking Log

History

This policy was adopted in 2012; 2016; 2021; updated June 2022