Information on summer student stipends to assist in making a grant budget.
Under Treasury Regulation Section 1.119-1, the payments Davidson College makes to students for grant-related work, including salary/stipends, housing and meals, are taxable to the student, and are subject to Federal, State and FICA/MDCR (FICA and Medicare) withholding from the student.
In addition, unless separately funded by the grant, the College's matching contribution for FICA/MDCR of 7.65 percent must be deducted from the total compensation amount per student before setting the amount available for salary/stipend, housing and meals.]
Example (actual amounts for housing and meals may differ):
Grant A has $3,000 per student for summer compensation and FICA/MDCR is not separately funded.
$3,000.00 Total compensation amount minus
($213.19) FICA/MDCR withholding ($3,000 minus [$3,000 divided by 1.0765])
$2,786.81 Net amount for student wages/stipend, housing and meals