Procedures for Payments to Nonresident Aliens
IMPORTANT: Preparing and completing the documents needed to pay a nonresident alien can be very time consuming and must be done before a check can be released to them. If you are aware that you are going to use the services or reimburse a nonresident alien, please contact the Accounts Payable Supervisor immediately.
Federal and State laws require the University to obtain a tax identification number (TIN) from each payee. Businesses, Corporations, Limited Liability Partnerships and/or Corporations need to submit a Federal Employer Identification Number. Individual or sole proprietors must submit Social Security Number or Individual Taxpayer Identification Numbers. Nonresident aliens without a TIN need to apply for and receive a TIN prior to University excluding taxes from a payment by a tax treaty exemption. A TIN is not required for travel reimbursments made under an accountable rules plan.
The Internal Revenue Service (IRS) can penalize the University $100 per tax form submitted without a TIN. IRS penalties will be charged to the University department or program center submitting payments without a TIN.
Foreign visitors being reimbursed for travel expenses are not subject to Federal tax if proper documentation is provided (please see Travel Expense Reimbursement for Foreign Visitors below). Honoraria payments made to nonresident aliens are subject to 30 percent Federal withholding and 7% State withholding. For example, a guest lecturer receiving a $2,000 Honoraria payment would receive a check in the amount of $1,260. The $740 withheld represents Federal Tax ($2,000 x 30% = $600) and State Tax ($2,000 x 7% = $140).
Any visitor in a B-1, B-2, WB, or WT visa classification who is engaged in academic activities may be reimbursed or receive payment for service. The academic activity in which the visitor is engaged can last no longer than nine (9) days. In addition, the visitor cannot accept payment of expenses and/or honorarium from more than five U.S. institutions in the previous six months. If either of these conditions is exceeded the individual may NOT receive honorarium or honorarium plus reimbursement for expenses. If making a payment to a foreign visitor with a visa classification other than B-1, B-2, WB, or WT please contact the Accounts Payable Supervisor immediately.
Incomplete documentation will be return to the department for completion. Listed below are the documents required for each of the different types of payments.
Travel Expense Reimbursement for Foreign Visitors:
- Payee Data Record (Form 204 - must have original signature of Payee and include a taxpayer I.D. number ( Social Security Number or Individual Taxpayer Identification Number )
- Copy of I-94 "Arrival Departure" card (provided by Payee, this form is issued and completed when payee enters the U.S. )
- Copy of passport including passport number and visa sticker/stamp (provided by Payee)
- Honoraria statement (University provides to payee)
- Receipts for travel expense (other than per diem) are required. If receipts are not provided the payment is taxable income and subject to withholding and reporting.
Honoraria Payment to Foreign Visitors:
- Payee Data Record (Form 204 - must have original signature of Payee and include a taxpayer I.D. number SSN or ITIN )
- Copy of I-94 "Arrival Departure" card (provided by Payee, this form is issued and completed when payee enters the U.S. )
- Copy of passport including passport number and visa sticker/stamp (provided by Payee)
- Honoraria statement (University provides to payee)
- If claiming tax treaty, payee must complete and sign Form 8233
- Must submit Direct Pay Request with itemized invoice
Payments to Independent Contractors who are not U.S. Citizens or Resident Aliens:
- Payee Data Record (Form 204 - must have original signature of Payee and include a taxpayer I.D. number SSN or ITIN )
- Copy of I-94 "Arrival Departure" card (provided by Payee, this form is issued and completed when payee enters the U.S. )
- Copy of passport including passport number and visa sticker/stamp (provided by Payee)
- Honoraria statement (University provides to payee)
- If claiming tax treaty, payee must complete and sign Form 8233
- Must submit Direct Pay Request with itemized invoice attached
Last Revised May 15, 2006
