Do clinical trial payments count as taxable income?
In the U.S., most flat-rate payments to research participants—such as stipends or honoraria—are considered taxable income by the IRS. Reimbursements that cover documented expenses, like travel or meals, are not taxable. Rules differ internationally, which adds another layer of complexity.
That uncertainty is exactly why the question comes up so often. Participants want to focus on their health, not the fine print of a tax code. Sites hear the questions daily but can’t give tax advice, and sponsors risk hesitation or dropouts if the issue isn’t addressed clearly.
When taxes become a barrier to participation
Unclear tax rules can stop participants from joining a trial at all. If participants think the money might put their benefits at risk or trigger a tax bill they can’t afford, many will decide it’s safer to walk away—or they may decline payments altogether, taking on unnecessary financial burden, because they misunderstand or fear the tax requirements.
At the site level, staff get pulled into questions they aren’t equipped to answer. They want to support participants but can’t cross into giving financial or legal advice. It creates frustration on both sides.
For sponsors, these small moments add up. Enrollment slows, dropouts rise, and timelines slip—all because no one clarified how payments interact with taxes. Convenience matters here too. When payments are easy to understand and access, participants hesitate less and sites can keep the focus on care.
What do U.S. tax rules actually say?
1. Baseline
Flat-rate payments to research participants are generally taxable. Many institutions treat payments to clinical trial participants as taxable income reportable on Form 1099-MISC (often in Box 3, “other income”) when annual payments meet reporting thresholds.
2. SSI nuance
For people on Supplemental Security Income (SSI), there’s a specific carve-out. The first $2,000 per calendar year of compensation for participating in an IRB-approved trial that studies a rare disease/condition is excluded from income for SSI purposes.
Reimbursements for expenses (e.g., travel, meals) are excluded under separate rules and don’t count toward that $2,000 cap.
3. What changed in 2025 law
In 2025, Congress raised the reporting threshold for Forms 1099-MISC from $600 to $2,000 starting in 2026 (indexed thereafter). This change only affects when participants receive a tax form—it doesn’t change the underlying rule that income is taxable.
4. Active policy efforts
National patient-advocacy groups are backing bills to reduce the tax burden on participants. The Clinical Trial Modernization Act would amend the tax code so that participant stipends or per-diems up to $2,000 aren’t taxable and wouldn’t count against income limits for programs like Medicaid; it also clarifies that certain sponsor support is allowed under anti-kickback laws (introduced May 20, 2025).
5. Site-community perspective
Site advocates are pressing for broader reforms, including exempting travel reimbursements from OIG restrictions and removing payment caps altogether for participants in rare disease trials. They point to current rules as barriers to enrollment and diversity.
What participants need to know
Payments count as income. The IRS generally considers compensation like flat-rate stipends and honoraria to be taxable. However, reimbursements that simply make a participant whole for out-of-pocket expenses (with receipts) are not taxable. Either way, participants are responsible for reporting any taxable payments they receive, even if no tax form is issued.
Forms may arrive at tax time. If annual payments cross certain thresholds, payers are required to issue a Form 1099-MISC (or a Form 1042-S for non-U.S. participants). These forms show up around February and must be included in a tax return.
Benefits programs can be affected. For people receiving income-based benefits like SSI or Medicaid, additional income from a trial can reduce eligibility. The Centers for Medicare & Medicaid Services notes that earned and unearned income may both factor into program limits.
Keep documentation. Participants should save payment records, travel receipts, and any forms received. This makes it easier to confirm what portion is reimbursement (often not taxable) versus stipends or honoraria (generally taxable).
...and the grey areas
Tax treatment isn’t the same everywhere. A global study might cover sites in the U.S., Europe, and Asia—each with its own rules on whether participant payments are taxable and how they should be reported. What looks straightforward in one country can create compliance risks in another.
Even in the U.S., participants often struggle to understand the difference between a taxable stipend and a non-taxable reimbursement. The rules themselves may be clear, but if the explanation isn’t, participants may decline payments or worry about unexpected consequences.
That’s why clear communication matters. Convenience is just as important. Participants need to know how their payments are categorized, sites need language they can use without crossing into financial advice, and sponsors need confidence that rules are applied consistently across studies. Without that clarity, uncertainty spreads—and uncertainty leads to hesitation.
How Scout brings clarity
Scout makes sure participants, sites, and sponsors have the clarity they need to avoid surprises. We don’t give tax advice.
We build convenience into every layer of payments so participants face fewer hurdles, sites avoid unnecessary admin, and sponsors don’t lose time to confusion.
- Convenient, transparent reporting for participants. They can see exactly what they’ve received and in what form, so they’re not left guessing at tax time.
- Clear distinction between stipends and reimbursements. Our systems separate compensation from expense coverage, giving participants confidence and reducing confusion.
- Tax documents handled. Scout issues the appropriate forms (such as 1099-MISC or 1042-S) directly to participants, so sponsors and sites don’t need to manage tax reporting.
- Support made easy for sites. We provide resources and language staff can use when tax questions come up, helping coordinators reassure participants without overstepping their role.
- Global compliance frameworks. With studies running in more than 100 countries, our approach accounts for regional rules and requirements so sponsors can manage payments consistently and confidently.
Want to take a closer look? Check out our resources:
Taxes shouldn’t be the reason someone turns down a clinical trial. The focus belongs on research and participant care, not on tax codes and reporting thresholds.
With the right support, participants can take part without added worry, sites can answer questions without stepping beyond their role, and sponsors can keep studies on track with stronger retention.
Want to see how compliant, participant-friendly payments can support your study? Let’s talk.
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