Transition Guidelines

Payroll vs. Stipends Timing

Stipend payments are issued on the first of each appointment month, and direct deposits are usually processed within the same business day. However, it may take 2-3 business days for some banks/credit unions to deposit the stipend.

When transitioning off the grant and returning to standard payroll, there will be a gap between the final stipend payment and the first paycheck. For example, if the termination date is June 30, the final stipend payment will be issued on June 1st, and the first payroll check for the period of July 1-15th will be received on July 22nd.

Payroll Set-up & Benefits

Payroll revisions can cause problems for postdocs, such as double payments or loss of benefits. To avoid this, we reduce their compensation to $1 while they receive stipend payments from an NRSA grant. Their FTE remains at 1.0 so they can keep their health insurance benefits.

Health Insurance

Fellows can keep their health insurance during an NRSA fellowship with no change to coverage. However, the payment method will change. Instead of being paid through payroll, the insurance will be billed manually and the department will pay their portion via journal entry, while the trainee pays their portion directly from their account.

To move the trainee's insurance payment from payroll to manual billing, the department provides an ACH form to HR, which allows payment from the trainee's checking account. T32 grants may offer money for the department's insurance portion, but this varies and requires individual discussion. When the fellowship ends, the department must move the insurance back to payroll and cancel the ACH.

Retirement 

If a postdoc receives retirement benefits when hired by the University, departmental approval is needed if they will be paid during their NRSA fellowship. Benefits must be paid from a departmental activity as it's an unallowable cost. The SVPHS Research Unit has a workaround, which they can share. No compensation is paid via payroll means that supplemental retirement benefits, such as employee contributions to 403(b) or 457(b), won't be available while appointed to a fellowship.

Flexible Spending Accounts

Because there is no compensation being paid via payroll, these benefits will not be available to postdocs while they are appointed to a fellowship. There must be compensation to defer to be eligible for these accounts. 

Taxes

Stipend payments are subject to federal and sometimes state income tax, but the University of Utah doesn't withhold taxes or issue 1099s. Postdocs should consider paying estimated taxes and consult with their own tax professional as the University can't provide tax liability guidance. T32 trainees can obtain tax code references from their HR liaison and NIH Statement of Appointment, U of U Traineeship form, and award letter. Section 117 of the Internal Revenue Code applies to scholarships and fellowships.

NIH Stipend Rates

NIH sets NRSA stipend rates annually, which may differ from a postdoc's current salary. A higher stipend is a win, but if it's lower, their department may supplement to avoid penalties. It is common for new NRSA rates to be released in the middle of a postdoc’s fellowship appointment year. Stipend rates remain unchanged for a full 12-month appointment unless revised, and reappointments offer an increase. Postdoctoral experience, not the Ph.D. degree date, determines the stipend rate. A gap between earning the degree and starting the first postdoc affects the experience calculation.

Parking

Trainees are responsible for pre-paying for parking permits through University Commuter Services. These costs are unallowable on the NRSA grants, and there is no administrative mechanism by which parking permit fees can be deducted from stipend checks. 

NIH Payback Obligation

Trainees have a payback obligation to NIH in the first 12 months of their postdoctoral research training period. If they continue their T32 training for a second year, the payback obligation of the first year is fulfilled. Alternatively, they can fulfill the obligation by engaging in a second year of health-related research, training, or teaching. The payback agreement is generated upon completion of the Statement of Appointment Form and must be mailed with the original signature to NIH.

Award Letter

T32 administrators can access an award letter for trainees before their T32 grant appointment. This letter was developed with Legal, Accounts Payable, and GCA, and covers important issues. If you haven't received the letter, ask your grant administrator to contact Jessica Kieper.

Employment Verification

To prove employment during a fellowship, standard HR forms may show a salary of $1. Instead, consider asking your lender if they accept these two documents: 1) A letter from your PI/mentor stating your employment status and annual salary, and 2) A notarized letter from your home department administrative manager/director, along with a copy of the Traineeship form and Vendor Summary report.

The letter includes language like:

“I am writing to verify that has been paid on a stipend through the University of Utah on the Metabolism Training Grant from _/_/  - _/_/. Because stipend payments are processed through the Accounts Payable department rather than Payroll, awardees are not given a paystub or statement, the payments are simply deposited to their bank monthly. The university does not produce any tax forms such as 1099 on stipends; for questions, please contact our Tax Services department at 801-581- 3428. We ask that you accept the following documents as proof of payment: Educational/Research Traineeship Grant Form - this is the form we use to set up payment with Accounts Payable, List of payments from _/_/ - _/_/ from our financial management system.”