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Policies and Procedures

Policy 1118 – Foreign National Independent Contractors

July 1, 2004
Last Updated
August 24, 2009
Responsible University Officer
Director of Payroll Services
Responsible Unit
Payroll Services

Policy Statement

Foreign nationals may perform independent personal services for the University as independent contractors, but may be subject to special federal income tax withholding requirements.

Independent contractors who are classified as resident aliens are treated in the same manner as U.S. citizens; in that, the payments they receive are not subject to federal income tax withholding and such payments are reported to the individual and to the IRS on Form 1099.

As a general rule, resident alien independent contractors are not eligible for tax treaty benefits; however, if the resident alien is performing teaching or research services as an independent contractor, s/he may be able to exclude payments received under a tax treaty between the U.S. and his/her country of residence.

Nonresident alien independent contractors, however, are subject to a 30% federal income tax withholding rate unless a tax exemption is claimed based on a U.S. tax treaty with the nonresident alien's country of residence. Payments made under independent contractor agreements are reported to the nonresident alien and to the IRS on Form 1042-S.

Reason for Policy

The purpose of this policy is to provide information regarding tax withholding for foreign national independent contractors.



Special Situations

For nonresident aliens, the Foreign National Information Form (PR-100) and Form W-8BEN must be attached to the AP-1a. Additionally, nonresident aliens requesting a tax withholding exemption based on a U.S. tax treaty must complete Form 8233, and resident aliens requesting such a withholding exemption must use Form W-9.


  • 1118.1 - Completing Tax Withholding Forms as a Foreign National Independent Contractor

Additional Information

Frequently Asked Questions


Related Data



Independent Contractors Payroll Services 919-962-0046


August 24, 2009
January 3, 2005