Following her recent webinar Best Practices for Participant-Centric Payments in Clinical Trials, Laura Hilty of Forte answers attendee questions on 1099 reporting and sponsor compensation for automatic participant payment systems.
What are the exact 1099 tax reporting requirements for participants compensated by clinical research sites? Do participant payment systems automate this process?
If the participant is simply being reimbursed for out-of-pocket expenses, the payment does not qualify as taxable income. However, if the participant is being compensated for participating in a study, and he or she has accumulated over $600 in study-related compensation in a single calendar year, then this is seen as taxable. At this point, the site should provide a 1099-MISC to the participant. Our Participant Payments solution, as well as other payment systems help to automate this process.
To learn more about 1099 reporting requirements and a key exception to this rule, you can read this more in-depth article on the Forte blog.
Do you have any additional tips on working with sponsors to cover the cost of an automated payment system?
In the webinar, I discussed a few reasons why using a participant-centric approach to stipends and reimbursements makes sense for all parties involved. Sites and sponsors benefit from happy participants, and allowing the patient to choose his or her payment method can go a long way toward retention. Sometimes we don’t realize how much we burden subjects by delaying payments. By helping with the cost of a payment system, the sponsor can affect a real, positive change in the lives of their study volunteers.
Of course, if we’re making the case to a sponsor, there needs to be an ROI element to this as well. Automated systems typically save time and money for the sites themselves, and some of those savings can be passed through to the sponsor in study budgets. Sponsors that directly work with stipends and other payments will see these benefits as well. In the webinar, we briefly covered the ROI observed by Indiana University (IU) Simon Cancer Center after implementing our payments system.
Watch the full webinar to learn more about how patient-centric payments systems can improve the experience for participants, sites and sponsors.