# Understanding Honoraria: Definition, Uses, and Tax Implications

## What Is an Honorarium?

Honoraria are voluntary payments for services where no fees are traditionally expected, often seen in academic or conference settings. These payments, used to cover costs for guest speakers or volunteers, are considered taxable income. For instance, a speaker at a conference might receive an honorarium for travel expenses.

### Key Takeaways

*   An honorarium is a voluntary payment for services where no fee is mandatory, typically given to guest speakers or volunteers.
*   Honoraria are taxable and must be reported as income to the IRS, often using a 1099-MISC form if the amount is $600 or more annually.
*   Although an honorarium is not usually tax-free, certain exceptions apply, such as for ministers performing religious duties.
*   The payment is considered self-employment income and may be reported on IRS Form 1040, potentially subject to self-employment tax.
*   Receiving honoraria in different states could result in the need to file multiple state tax returns due to varying state tax claims.

## Understanding the Mechanics of an Honorarium

An honorarium is different from a per diem, which covers daily expenses like hotel stays, travel, and food for business trips.

An honorarium is given for services that deserve payment but cannot be requested due to propriety. For example, a world-renowned professor gives a speech to a scholarly foundation, and the foundation provides the professor with an honorarium for their service.

For example, one hour of speaking might require three days of work. Also, giving a speech multiple times needs hours of practice and improvement each time.

> **Important**
>
> Money made from honoraria is usually not considered tax-free income.

The speaker's travel and recovery time require consideration as well. Following up on the example above, how can one hour of speaking require three days of work? There can be one day for practicing and improving the speech, another day for travel and deliverance, and a third day for getting back into the speaker's normal routine. Those three days cannot be used for making money through other methods, justifying an honorarium.

## Navigating Honorarium Tax Obligations

Honoraria are taxable like any other income. If an organization pays $600 or more in a year, it must report it to both the speaker and the [Internal Revenue Service (IRS)](https://www.investopedia.com/terms/i/irs.asp) on a [1099-MISC](https://www.investopedia.com/terms/f/form1099-misc.asp) form.

Speakers must report honorarium income even if they don't receive a Form [1099](https://www.investopedia.com/financial-edge/0110/10-things-you-should-know-about-1099s.aspx). There are rare exceptions to the rule. For example, the IRS allows ministers a tax [exemption](https://www.investopedia.com/terms/e/exemption.asp) on honoraria paid for giving speeches or performing weddings, baptisms, or other activities. The honoraria may be considered gifts rather than taxable compensation if the intent was to give the honoraria as such.

An honorarium counts as self-employment income and is normally reported with expenses on Schedule C of Form 1040. For example, the speaker may deduct the cost of their unreimbursed plane ticket and lodging, having speech materials printed, maintaining a website, and using a cellphone for business. If honoraria are not part of a speaker's regular business, they are reported as other income on the [1040](https://www.investopedia.com/terms/1/1040.asp) document. An honorarium may be subject to [self-employment tax](https://www.investopedia.com/terms/s/selfemploymenttax.asp) as well.

Earning an honorarium while speaking out of state can lead to more taxes. Many states see an out-of-state speech as a nexus, allowing them to tax the speaker's income. As a result, a speaker may end up filing and paying multiple state tax returns.

## What Is the Scenario for an Honorarium to Be Paid?

An honorarium is often provided for services meriting compensation that propriety prevents from requesting.

## Who Is Usually Paid an Honorarium?

An honorarium is a payment given to guest speakers who don’t charge a fee for their services. It is often used in academic settings by universities.

## How Is an Honorarium Treated Tax-wise?

An honorarium is taxable. Organizations paying honoraria report them to both the speaker and the Internal Revenue Service (IRS) on a 1099-MISC form if compensation is $600 or greater in one calendar year. A speaker must report the honorarium as income, even if they don’t receive Form 1099.

## The Bottom Line

An honorarium is a voluntary payment typically offered to guest speakers or volunteers for services where fees aren't standard. While it helps address unreimbursed expenses, it is taxable and may require reporting through IRS Form 1099-MISC if over $600. Speakers should ensure they report honoraria as income and consider the impact on self-employment taxes and state filings.  

> **Article Sources**
>
> 1.  Internal Revenue Service. “[Publication 525: Taxable and Nontaxable Income](https://www.irs.gov/pub/irs-pdf/p525.pdf),” Page 3.
>     
> 2.  Internal Revenue Service. “[Instructions for Forms 1099-MISC and 1099-NEC](https://www.irs.gov/pub/irs-pdf/i1099mec.pdf),” Pages 1–2.
>     
> 3.  Internal Revenue Service. “[Topic No. 417, Earnings for Clergy](https://www.irs.gov/taxtopics/tc417).”
>     
> 4.  Internal Revenue Service. “[2023 Instructions for Schedule C](https://www.irs.gov/pub/irs-pdf/i1040sc.pdf),” Pages 9–10.
>     
> 5.  Internal Revenue Service. “[Form 1040, U.S. Individual Income Tax Return](https://www.irs.gov/pub/irs-pdf/f1040.pdf).”
>     
> 6.  Internal Revenue Service. “[Self-Employment Tax (Social Security and Medicare Taxes)](https://www.irs.gov/businesses/small-businesses-self-employed/self-employment-tax-social-security-and-medicare-taxes).”
>     
> 7.  Harvard University, International Payee Tax Compliance. “[Honorarium](https://nratax.oc.finance.harvard.edu/topic/honorarium).”