Appeal from the Order of the Unemployment Compensation Board of Review in case of In Re: Claim of Richard E. Sharvy, No. B-137058.
Richard Sharvy, petitioner, for himself.
Michael Klein, Assistant Attorney General, with him Gerald Gornish, Attorney General, for respondent.
Judges Crumlish, Jr., Blatt and Craig, sitting as a panel of three. Opinion by Judge Crumlish, Jr.
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The sole issue raised by this petition for review is whether a fellowship grant in the amount of $11,250 paid to Richard Sharvy by the National Endowment for the Humanities (NEH), a federal governmental agency, constitutes "wages" within the meaning of Section 4(x) of the Unemployment Compensation Law (Act).*fn1 The Unemployment Compensation Board of Review affirmed a referee's determination that such a fellowship award payment was not wages within the meaning of the Act. We affirm.
Sharvy had been employed by Swarthmore College as a researcher from October, 1972 until mid-April, 1973, at a salary of $250 per month. On February 10, 1974, Sharvy applied to the Bureau of Employment Security (Bureau) for unemployment benefits which
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were awarded for the base year consisting of last quarter of 1972 and the first three quarters of 1973. The amount of Sharvy's compensation benefits was computed solely on the basis of his salary from Swarthmore and determined to be $32.00 per week. During the same period of time he was employed by Swarthmore, Sharvy was the recipient of a fellowship award from NEH in the amount of $1,250 per month in return for which he filed a report on research performed in the fields of semantics and music theory.
It is Sharvy's contention that the Bureau improperly excluded the fellowship award from his base year wages when computing the amount of benefits he was eligible to receive and further argues that his contention is supported by the fact that the Internal Revenue Service (IRS) has declared amounts received from an NEH fellowship grant taxable as compensation for services includable in gross income.
In determining whether the amounts at issue in this litigation are wages, we must look to the definition of "wages" found in subsection (x) of Section 4 of the Act which provides in pertinent part: "'Wages' means all remuneration (including the cash value of mediums of payment other than cash) paid by an employer to an individual with respect to his employment. . . ." The issue is thus whether the scholarship grant represented "remuneration" under Section 4(x) of the Act and whether or not such payments are taxable by the IRS as gross income is not controlling in the determination. The terms "income" and "wages" obviously are not synonymous. Section 61(a) of the Internal Revenue Code of 1954 (Code)*fn2 defines gross income as "all income from whatever source derived" including, under Section 61(a)(1) "[c]ompensation for services." Thus, income is an all-encompassing term and many items which qualify
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as income are clearly not wages, i.e., interest, rent and dividends. Sharvy's contentions on this appeal would render ...