3/2/05 Payments to Non-Resident Aliens Finance and Administration Financial Operations The Office of...
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Transcript of 3/2/05 Payments to Non-Resident Aliens Finance and Administration Financial Operations The Office of...
3/2/05
Payments to Non-Resident Aliens
Finance and Administration
Financial Operations
The Office of Disbursements
3/2/05
Index• Who Is a Non-Resident Alien?• Why Are Payments to Non-Resident Aliens Subject to Tax Withholding?• What Are the Ramifications of Not Complying With Section 1441 of the IRS Code?• Types of Payments Subject to Review…• Employee Compensation Payment Flowchart• What Forms Are Required for Employee Compensation Payment?• Travel Expense Reimbursement (Non-employee) Payment Flowchart• What Forms Are Required for Travel Expense Reimbursement (Non-employee) Payment?• B1/WB & B2/WT Visa Requirements-TRAVEL EXPENSES/PER DIEMS
3/2/05
Index - Continued
• B1/WB & B2/WT Visa Requirements-TRAVEL EXPENSES/PER DIEM• Scholarship Payment Flowchart• What Forms Are Required for Scholarship Payment?• Honorarium/Award Payment Flowchart• What Forms Are Required for Honorarium/Award Payment?• B1/WB & B2/WT Visa Requirements-HONORARIUM
• Consultant/Independent Contractor Payment Flowchart• What Forms Are Required for Consultant/Independent Contractor Payment?• Where Can These Forms Be Found?• Appendix of Required Forms
3/2/05
Who Is a Non-Resident Alien?
• For tax purposes, anyone who is NOT a U.S. Citizen or permanent resident alien (green card holder) and has not satisfied the substantial presence test is considered a non-resident alien who may be subject to tax withholding.
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Why Are Payments to Non-Resident Aliens Subject to Tax
Withholding?
• Under internal revenue code section 1441 certain payments made to non-resident aliens are subject to possible tax withholding. Treasury regulation 1.1461-2 requires all such payments be reported to the IRS
• It is the University’s responsibility to withhold tax unless evidence is provided to show exemption from tax
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What Are the Ramifications of Not Complying With Section 1441
of the IRS Code?
• Failure to comply with this code section may result in the University being held liable for the tax that should have been withheld, plus penalties and interest.
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Types of Payments Subject to Review…
• Employee compensation• Travel expense reimbursement (non-employee)• Scholarship (non-qualified portion only)
– Qualified - tuition, enrollment fees, and supplies– Non-qualified – everything else, including, but not
limited to stipends, housing, board, transportation and cash
• Honorarium or award/prize• Consultant/independent contractor
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Employee Compensation Payment Flowchart
SS card or SSN
Foreign National Info Form
US Visa (copy)
GSU Department completes required forms.
All forms and the employee are referred to
Human Resources.
Employee completes
required forms.
Human Resources distributes employee packet to employee.
Prior to the scheduled appointment, the Tax Accountant reviews all documents, completes a W-4 and form 8233, enters the employee's information into the
withholding software and performs a tax residency and withholding
analysis. At the appointment the Tax Accountant reviews all forms
with the employee. Once complete, the Tax Accountant
forwards the withholding information, W-4 and form 8233
to Payroll for processing.
Payroll generates payment less any
applicable withholding to
employee.
Tax Accountant reports and remits withholding to the IRS.
HR Customer Service completes and reviews all required forms. HR schedules an appointment for the employee to meet with the Tax Accountant. The Tax Accountant is notified of the scheduled appointment. HR forwards all documents to the Tax Accountant
prior to the scheduled meeting.
Passport (copy)
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What Forms Are Required for Employee Compensation
Payment?
FormGSU
DepartmentGSU
Employee
GSU HR Customer Service
Tax Accountant
Personnel Action Form XI-9 (copy of both sides) X XPassport (copy) XUS Visa (copy) XForeign National Information Form XSS card or SSN XForm 8233 XW-4 X
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Travel Expense Reimbursement (Non-employee) Payment
FlowchartI-20(F1), DS-2019 (J1) or I-797(H-1B) (copy)*
I-94 (copy of both sides)
Passport (copy)
GSU Department completes
required forms.
Non-employee Traveler completes
required forms.
Department reviews forms for completeness and accuracy.
Department contacts Purchasing to obtain a
vendor number to be used in PeopleSoft voucher entry.**
Tax Accountant reviews forms, performs tax
residency and withholding analysis and forwards documents to
the Disbursements Office for payment.
The Disbursements Office generates
payment less any applicable withholding to Non-employee Traveler.
Tax Accountant reports and remits withholding to the IRS.Travel Receipts
Payment Req Form (with PS voucher number)*GSU Department enters an
express voucher in PeopleSoft (PS) for the payment request.
The PS voucher number is written on the payment request
form and all documents are forwarded to the Tax
Accountant.
** Neither an ITIN nor a SSN is required for the non-employee traveler by IRS code section 1441 under GSU's accountable plan. However, a vendor#, which begins 995, is required for express voucher entry in
PeopleSoft.
ITIN*
US Visa*
Foreign National Info Form* and B Visa Cert form for B Visa Holders
*Travel amounts are limited to federal per diem rates and must be substantiated by receipts. Additional forms may be required if reimbursement amounts are greater than allowable per diem rate.
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What Forms Are Required for Travel Expense Reimbursement
(Non-employee) Payment?Form
GSU Department
Non-employee Traveler
Tax Accountant
Payment Request Form XAttach original receipts to Payment Req Form XPassport (copy) XI-94 (copy of both sides) X
B Visa Certification Form X Xrequired if travel expense reimbursement exceeds federal per diem rates
Foreign National Information Form XIndividual Tax Identification Number XUS Visa XI-20(F1), DS-2019(J1) or I-797*(H-1B) (copy) XForm 8233 X
*I-797 is completed and issued by the INS.9
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B1/WB & B2/WT Visa Requirements-TRAVEL EXPENSES/PER DIEMS
B1/WB Visa: – may be reimbursed for reasonable travel and
incidental expenses (evidenced by receipts for all lodging and travel) incurred in connection with a usual academic activity, regardless of the duration of the activity and regardless of whether the individual has previously received payment from other educational institutions.
– No SSN or ITIN required for payments that fall under the accountable plan rules.
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B1/WB & B2/WT Visa Requirements-TRAVEL EXPENSES/PER DIEM
B2/WT Visa: – may be reimbursed for reasonable travel and incidental
expenses (evidenced by receipts) incurred in connection with a usual academic activity, not exceeding 9 days in duration, provided that the individual has not received honoraria from more than 5 educational institutions in the previous 6 month period (9/5/6 rule)
– Maximum Per Diem for B2/WT under GSU’s accountable plan is $43/day for meals and incidentals. (9 days @ $43 per day= $387 )
– No SSN or ITIN required for payments that fall under the accountable plan rules.
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Scholarship Payment Flowchart
* If the s tudent does not have an ITIN and the Tax Accountant determ ines they are eligible for a treaty,
the s tudent m us t m ake an appointm ent with the Tax Accountant to file Form W-7. The s tudent
should bring original Passport, US Visa, I-94 and I-20 or DS-2019 to the appointm ent.
funded by GSU Foundation.This step is only required for scholarships
I-20(F1), DS-2019 (J1) or I-797(H-1B) (copy)
US Visa (copy)
I-94 (copy of both sides)
Passport (copy)
GSU Department completes
required forms.
Student completes
required forms.
Department reviews forms for completeness and verifies foreign student status in Banner (screen
SPAINTL). The department forwards forms to GSU Foundation.
Tax Accountant reviews forms, completes form W-8BEN and witnesses W-7 if applicable, performs tax residency and withholding
analysis and forwards notification to Financial Aid and Student Accounts for
processing.
Financial aid applies scholarship to
student's account in Banner.
ITIN or W-7*
Tax Accountant reports and remits withholding to the IRS.
Foreign National Info Form
Foundation Disbursement Form
Tax Accountant charges applicable withholding amount to student's account
in Banner.
GSU Foundation verifies that funds are available for the scholarship, notifies the
department of any scholarships referred to the Tax Accountant
and forwards all documents to the Tax Accountant for review.
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What Forms Are Required for Scholarship Payment?
FormGSU
DepartmentGSU
StudentTax
Accountant
Foundation Disbursement Form XForeign National Information Form XIndividual Tax Identification Number or W-7 X witness W-7Passport (copy) XI-94 (copy of both sides) XUS Visa (copy) XI-20(F1), DS-2019(J1) or I-797*(H-1B) (copy) XW-8BEN X
*I-797 is completed and issued by the INS.
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Honorarium/Award Payment Flowchart
I-20(F1), DS-2019 (J1) or I-797(H-1B) (copy)
US Visa (copy)
I-94 (copy of both sides)
Passport (copy)
GSU Department completes
required forms.
Student/Guest completes
required forms.
Department reviews forms for
completeness and verifies foreign
student status in Banner (screen SPAINTL). All documents are
forwarded to the Tax Accountant.
Tax Accountant reviews forms, completes form W-
8BEN or 8233, performs tax residency and withholding
analysis and forwards documents to the
Disbursements Office for payment.
The Disbursements
Office generates payment less any applicable withholding to student/guest.
ITIN or SSN
Tax Accountant reports and remits withholding to the IRS.
Foreign National Info Form
Payment Req Formand B Visa Cert Form for B Visa Holders
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What Forms Are Required for Honorarium/Award Payment?
FormGSU
Department
GSU Student/
GuestTax
Accountant
Payment Request Form XForeign National Information Form XIndividual Tax Identification Number or W-7 X witness W-7Passport (copy) XI-94 (copy of both sides) XUS Visa (copy) XI-20(F1), DS-2019(J1) or I-797*(H-1B) (copy) XW-8BEN or Form 8233 XB Visa Certification Form X X*I-797 is completed and issued by the INS.
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B1/WB & B2/WT Visa Requirements-HONORARIUM
• B1/WB & B2/WT Visa:– may be paid an honorarium for usual academic
activity not exceeding nine days in duration, provided that the individual has not received honoraria from more than 5 educational institutions in the previous 6 month period (9/5/6 rule)
– Must have SSN or ITIN to receive payment (Recommendation: Have visitor obtain number prior to arriving in the United States)
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Consultant/Independent Contractor Payment Flowchart
I-20(F1), IAP-66(J1) or I-797(H-1B) (copy)
US Visa (copy)
I-94 (copy of both sides)
Passport (copy)
GSU Department completes
required forms.
Consultant/independent contractor completes
required forms.Tax Accountant reviews forms, completes form
8233, performs tax residency and
withholding analysis and forwards documents to
the Disbursements Office for payment.
The Disbursements Office generates
payment less any applicable
withholding to consultant/ independent contractor.
ITIN
Tax Accountant reports and remits withholding to the IRS.
Foreign National Info Form
Consultant Req Form (with PS req #) or Payment Request Form (with PS voucher#)
Department reviews forms for completeness and accuracy.
Department contacts consultant/independent contractor
to obtain ITIN* to be used in PeopleSoft requisition/voucher
entry.
GSU Department enters a requisition/voucher in PeopleSoft
(PS) for the consultant/independent contractor using the ITIN* as the PS vendor number. The PS req/voucher # is
written on the consultant req/payment request form and all documents are forwarded to the
Tax Accountant.
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What Forms Are Required for Consultant/Independent
Contractor Payment?
FormGSU
Department ConsultantTax
Accountant
Consultant Requisition Form (> 1 day or >$4,999) XPayment Request Form (1 day or < $4,999) XForeign National Information Form XIndividual Tax Identification Number XPassport (copy) XI-94 (copy of both sides) XUS Visa (copy) XI-20(F1), DS-2019(J1) or I-797*(H-1B) (copy) XForm 8233 X
*I-797 is completed and issued by the INS.
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Where Can These Forms Be Found?
• Payment Request Form – http://www.gsu.edu/~wwwspc/Forms/paymentrequest.doc
• Consultant Requisition Form – http://www.gsu.edu/~wwwspc/Forms/Consultant.doc
• Foundation Disbursement Form – http://development1/foundation/fw/foundation%20disbursement%20form%2001_21_2004.doc
• Foreign National Information Form – http://www2.gsu.edu/~wwwspc/Forms/foreignnationals.doc
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Where Can These Forms Be Found?
• IRS form W-7 - http://www.irs.gov/pub/irs-pdf/fw7.pdf
• I-94, I-20, I-797 or DS-2019 – http://www.ins.gov
• Personnel Action Form - http://www.gsu.edu/~wwwhre/forms/PAFForm.pdf
• Federal per diem rates – http://www.gsa.gov/Portal/gsa/ep/contentView.do?contentId=17943&contentType=GSA_BASIC
• B Visa Certification Form http://www2.gsu.edu/~wwwspc/Forms/BVisaCert.pdf
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Appendix of Required Forms
Personnel Action Form XForm I-9 Employment Eligibility XForm SS-5 Application for a Social Security Card XForeign National Information Form XForm I-20, Certificate of Eligibility (F-1) XForm DS-2019, Certificate of Eligibility (J-1) XForm I-94 Departure Record XPayment Request Form XForm 8233 Exemption from Withholding for a NRA XForm W-7 Application for IRS ITIN XForm W-8BEN Certificate of Foreign Status XFoundation Disbursement Form XConsultant Requisition Form XConsultant Payment Authorization XB Visa Certification Form X
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