Policies and Procedures
Procedure 1116.1 – Tax Reporting for University-affiliated Foreign Nationals
July 18, 2009
August 24, 2009
Director of Payroll Services
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
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
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
August 24, 2009