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Policies and Procedures

Procedure 1116.1 – Tax Reporting for University-affiliated Foreign Nationals

Procedure Statement

Foreign nationals are required to fill out taxation forms. These forms are used in determining the appropriate method of taxation and withholding. To determine which forms should be completed, there are certain rules and regulations that are applied to each foreign national.

Forms and Instructions

The following forms are issued by Payroll Services to foreign nationals affiliated with the University as employees, independent contractors, and scholarship/fellowship recipients (More detailed information is provided for each of these foreign national affiliates in subsequent policies). The information contained in the forms is used for tax reporting requirements.

1. IRS Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding

IRS tax regulations require that certain payments be reported to the nonresident alien recipients after each calendar year on Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. This form is issued to the following nonresident aliens:

Employees using a tax treaty for withholding exemption

Independent contractors

Scholarship/fellowship recipients

2. IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

This form is used by Payroll Services to report to the IRS the income tax withheld on payments made to:

Nonresident alien scholarship/fellowship recipients

Nonresident alien independent contractors

3. Individual Taxpayer Identification Number (ITIN)

Individuals who are ineligible to obtain a Social Security number but are required to report their income must apply for an ITIN with the IRS. The ITIN is a nine-digit number used for tax purposes only.

4. 1116.1.1f - Certification of Academic Activity

According to the American Competitiveness Workforce Act of 1998, B-1 and WB visa holders may receive payment of honoraria and associated incidental expenses for "usual academic activity," if paid by a United States institution of higher education or by a nonprofit or governmental research organization. Under this act, an academic activity may not exceed nine (9) days at a single institution. In addition, such visa holders cannot have accepted honoraria and/or incidental expenses from more than five such institutions or organization in the previous six-month period. The signed and dated Certification of Academic Activity Form should be forwarded to Payroll Services with other appropriate forms to process such a payment.

Forms, Instructions, and Publications for Foreign Nationals from the Internal Revenue Service (IRS):

Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporations

Publication 519, U.S. Tax Guide for Aliens

Publication 970, Scholarships and Fellowships

Form W-7, Application for Individual Taxpayer Identification Number

Form 1040NR, U.S. Nonresident Alien Income Tax Return

Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return

Instructions for Forms 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons and

1042-S, Foreign Person's U.S. Source Income Subject to Withholding

Related Data

None.

History

Revised:
August 24, 2009