INTRODUCTION

The US Citizen and Immigration Services and Federal Law have placed numerous restrictions on making payments to foreign individuals including students, scholars and visitors. The restrictions limit the type of payments that may be made based on the individual’s visa type and sponsoring organization. The sponsoring department is responsible to make sure the individual receiving payment is legally eligible to receive the requested payment. See the Payment Authorization Matrix prior to inviting or engaging in a contract with a foreign individual to determine if the University can legally pay the individual.

It is the University’s policy not to make any payment to foreign individuals that are not allowed by law. Illegal payments to foreign individuals may result in fines to the University up to $10,000 per occurrence and/or possible criminal prosecution of University employees and detention or deportation of the foreign individual. As noted in the Accounts Payable Policy, the University will not reimburse any employee for payments to foreign individuals through personal funds.

Once it is determined that a foreign national can legally be paid, the payment may or may not be taxable. Under the Internal Revenue Code, payments to nonresident aliens for tax purposes are taxed differently than payments made to a U.S. citizen or resident alien. The regulations also place greater responsibility on the University, as a tax-withholding agent, to withhold and report taxes from nonresident alien payments.

Depending on the type of payment and the visa type of the individual, payments to nonresident aliens may be tax-free or taxed at a rate as high as 30%. See the Payment Authorization Matrix for general information about taxable rates or see the individual payment sections Accounts Payable,Payroll, and Scholarships for more detailed discussions.

This policy covers the most common tax issues relating to the University’s responsibilities in withholding and reporting nonresident alien tax; however, it does not cover every possible tax situation. If a payment is to be made that is not covered by the policy, contact the Finance Office prior to making the payment. The University is responsible for maintaining compliance with both the letter and the intent of all federal, state and local laws.

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LEGALITY OF PAYMENT: OBTAINING NECESSARY INFORMATION

Prior to making any payment to an individual whether through Accounts Payable, Payroll or Bursar Services (scholarships/fellowships) the department must determine whether the individual is a U.S. citizen, resident alien or nonresident alien. If paying an individual for performing services within the U.S., legality of payment is based on the visa type on which the individual entered the United States. If bringing someone to campus as a guest lecturer, performer, etc., please refer to the General Counsel's Policies and Procedures on Contracts for Guest Lecturers. A completed contract must accompany any request for payment to a guest lecturer or performer paid through the University's Accounts Payable Office.

If the department is unaware of the citizenship of an individual, have them complete a Form W-9 (Request for Taxpayer Identification Number and Certification). If the individual refuses to complete or is unable to complete the W-9, it is a good indication that the individual is not a U.S. citizen or resident alien. For those individuals that are nonresident aliens, the sponsoring department must verify that the payment to be made to the individual is legal by reviewing the Payment Authorization Matrix. The Matrix has the most common visa types and details as to what payments may be made to the specific visa type. If the applicable visa type or payment type is not on the Payment Authorization Matrix, please contact the General Counsel's Office or the Finance Office for more information.

Once the sponsoring department has determined that the payment may legally be paid to the nonresident alien, a determination must be made as to the taxability of the payment. See Obtaining Necessary Information under the Taxability Section of this policy for more information.

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TAXABILITY OF PAYMENT: OBTAINING NECESSARY INFORMATION

In order for the University to determine whether a non-U.S. citizen is a resident alien or nonresident alien for tax purposes, the individual must complete a Foreign National Tax Information Questionnaire. The information on the questionnaire is specific to the time the individual will be in the United States when receiving his/her payment. The Questionnaire must be completed in its entirety including the section of previous visits. This section’s information, including date of entry, date of exit, visa type and previous visit, is extremely important when determining the tax status of the individual. See the Instructions for completing the Foreign National Tax Information Questionnaire for more information. If information is incomplete, the form will be returned to the individual and accepted only when complete. Payment will not be made until the Finance Office obtains a fully completed questionnaire.

In addition to completing the questionnaire, the individual must attach the following documents before payment will be made:

Visa -- copy of the individual’s current visa that he/she entered the United States in which to receive payment

I-94 -- Arrival/Departure Form - copy of white card inside passport obtained from USCIS when individual most recently entered the United States.

I-20 -- If the individual is currently on an F visa (OR)
DS-2019 -- If the individual is currently on a J visa.

If an individual is a permanent resident alien (green card holder), the individual only needs to complete the Foreign National Tax Information Questionnaire through line 8 and sign or provide a copy of his/her Permanent Resident Card (green card). Individuals with green cards are classified as resident aliens for tax purposes and are treated the same as a U.S. citizen for tax purposes.

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DETERMINING RESIDENCY FOR TAX PURPOSES

The Internal Revenue Code provides two tests to determine whether a non-U.S. citizen is a resident alien or a nonresident alien for tax purposes. The Foreign National Tax Information Questionnaire(pdf) collects the information and documentation necessary for applying these tests.

The first test is the "green card" test. As noted above, if an individual is a permanent resident alien (green card holder), the individual is classified as a resident alien for tax purposes. Resident aliens for tax purposes are taxed in the same manner as a U.S. citizen.

If an individual does not meet the requirements of the "green card" test, the individual may still be classified as a resident alien for tax purposes based on the Substantial Presence Test (SPT). The SPT is a two-part test.

The individual must be present in the United States for 31 days in the current calendar year. AND

The individual must have been present in the United States for at least 183 days over the current year and the 2 preceding years. (Using the following formula)

 

Number of Days in U.S.

 

 

Current Year

 

x

1

=

1st Previous Year

 

x

1/3

=

2nd Previous Year

 

x

1/6

=

 

 

 

Total

 

The second part of the test is based on counting certain days during the current and previous two years and placing the number of days in the above formula. The days to be counted can be affected by numerous items and depends on the visa type the individual is on while in the United States. See Internal Revenue Service’s Publication 519 for more information on days that count towards the Substantial Presence Test and those days that are classified as "exempt."

If the total amount is 183 days or greater, the individual will be classified as a resident alien for tax purposes and will be taxed in the same manner as a U.S. citizen.

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DETERMINING PAYMENT TYPE

Once the payee’s residency status is determined, the next important step in establishing the taxability of the payment is determining the type of payment being made. Payments to nonresident aliens may be broken down into three categories: Accounts Payable (includes payments made using any University funds not covered by the other two categories), Payroll (separate sections on student employees and non-student employees) and Scholarships/Fellowships.

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PAYMENTS THROUGH ACCOUNTS PAYABLE

Expense reimbursements that fall under the University’s "Accountable Plan" are not taxable or reportable nor do they require a Social Security Number or Individual Taxpayer Identification Number if original receipts support all expenses. Unsupported amounts will be treated as payment for service and will be taxed at the appropriate rate (usually 30%), provided payment for service is legal. If the payment for service is not legal, the unsupported amounts will not be reimbursed to the individual. If expense reimbursement is for a nonresident alien who entered the United States for the sole purpose of interviewing with the University, proof of interview (copy of job posting, letter of invitation, etc.) must be attached to the Request for Check or Cash Reimbursement form(pdf).

If payment is to a foreign individual for services completed outside the U.S., this type of payment is classified as Foreign Source income. The University is not required to withhold taxes on foreign source income of a nonresident alien (does not apply to U.S. citizens or resident aliens). In these cases, the Payments to non-U.S. citizens policy does not apply. Just indicate on the check request that the payment is for a foreign individual for services performed outside the United States. No other documentation for the foreign individual is necessary.

Prior to contracting or promising payment to an individual, the individual departments must verify that payment can be made to the individual. If the individual is not a U.S. citizen and the service will be performed within the United States, the department must verify that the payment can be made using the Payment Authorization Matrix. If the payment cannot be made, the check request will not be processed through Accounts Payable or through any other University process. Bucknell University will not reimburse amounts (lodging, meals, travel reimbursement, etc.) paid to or on behalf of foreign individuals via personal funds.

If the payment is allowable, the department must have the individual complete the Foreign National Tax Information Questionnaire and attach the questionnaire and additional documentation to the Request for Check or Cash Reimbursement Form(pdf).Check requests that do not contain the appropriate attachments and/or incomplete attachments will not be processed until all required attachments are obtained. (See Request for Check or Cash Reimbursement Instructions)

All check requests (unless full amount is for travel reimbursement and all amounts are supported with original receipts) must include a Social Security Number (SSN) or an Individual Tax Identification Number (ITIN). See the Request for Check or Cash Reimbursement(pdf) Instructions for more information on completing a check request.

If an individual is a nonresident alien and he/she is unable to obtain a Social Security Number using Form SS-5 and he/she does not have an ITIN, then he/she must file for an ITIN using Form W-7 prior to any payment being made. Since it takes approximately 6 weeks to obtain an ITIN, an individual may attach a copy of their application for an IRS ITIN (Form W-7) to the Request for Check or Cash Reimbursement form. Without a SSN or an ITIN, the payment will be held until the Accounts Payable Office receives a completed copy of the W-7. The individual should contact the Accounts Payable Office once the ITIN is received. The ITIN is needed for year-end reporting. During the year-end reporting process, the University is required to notify the Internal Revenue Service of all individuals who did not provide an ITIN during the reporting tax year.

Accounts Payable will make no payments if a non-U.S. citizen does not complete the Foreign National Tax Information Questionnaire. Based on the information collected on the Foreign National Tax Information Questionnaire, the individual may be classified as a resident alien if he/she passes the"green card" test or the substantial presence test. If the individual meets either of these tests, he/she will be classified as a resident alien for tax purposes and no tax will be withheld. Otherwise, the appropriate tax amount will be withheld from the payment amount prior to check issuance. Withheld taxes on payments through Accounts Payable will be reported to the Internal Revenue Service and the individual on Form 1042-S.

If an individual receiving payment through Accounts Payable requests a tax treaty exemption, refer the individual to the Payroll Department. More policy information may be obtained in the Tax Treaty Section under Payroll.

Payments made with tax treaty exemptions may take up to 20 days for payment due to the 5 business day review period for the withholding agent and the 10 business day waiting period when filing a form 8233 with the IRS. See Accounts Payable Policy for payment processing detail.

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PAYMENTS THROUGH PAYROLL

Payments to Non-Student Employees

Foreign National Tax Information Questionnaire

All new non-student employees who are not U.S. citizens must complete the Foreign National Tax Information Questionnaire prior to receiving any payments from the University. The Questionnaire will be provided to the new employee during his/her meeting with Human Resources. If an individual passes the "green card" test, he/she will be classified as a resident alien for tax purposes and will be taxed in the same way a U.S. citizen’s payroll is taxed.

After the initial employment Questionnaire, all nonresident alien non-student employees will be required to complete an updated Questionnaire on an annual basis. The forms will be distributed to employees during November of each year and must be returned to the Payroll Office. Near the beginning of each calendar year, the Payroll Office will perform the Substantial Presence Test (SPT) for all current employees to determine residency status for the upcoming calendar year.

Substantial Presence Test (SPT)

The Office of Human Resources and/or the Finance Office will use the information on the Questionnaire to perform the SPT on all new non-U.S. citizen/resident alien employees.

If the SPT determines that the individual is a resident alien for tax purposes, the individual is treated as a U.S. citizen and is able to complete his/her W-4 any way a U.S. citizen can. However, if the SPT determines that the individual is a nonresident alien for tax purposes, the individual is limited in how he/she can complete his/her W-4. See the W-4 section for requirements for nonresident aliens.

Some nonresident alien non-student employees may be FICA tax exempt for a period of time when first coming to the United States. See the FICA discussion below for further details.

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Payments to Student Employees

Foreign National Tax Information Questionnaire

All nonresident alien students (employee and non-employee) must complete the Foreign National Tax Information Questionnaire prior to receiving any payments from the University including university scholarship. The Questionnaire will be provided to the new student at a meeting held by the International Student Advisor prior to the beginning of the first semester of classes.

After the initial Questionnaire, only nonresident students that have used the five-year limit of "exempt days" for the Substantial Presence Test (SPT) will be required to complete an updated Questionnaire on an annual basis. The forms will be distributed to applicable students during November of each year and must be returned to the Payroll Office. Near the beginning of each calendar year, the Payroll Office will perform the SPT for all applicable students to determine residency status for the upcoming calendar year.

Substantial Presence Test (SPT)

The Finance Office will use the information collected on the Questionnaire to complete the SPT on all new foreign national students. The SPT must be completed before any student can complete employment information or receive scholarship credit to their student account.

If the SPT determines that the individual is a resident alien for tax purposes, the individual is treated as a U.S. citizen and is able to complete his/her W-4 any way a U.S. citizen can. However, if the SPT determines that the individual is a nonresident alien for tax purposes, the individual is limited in how he/she can complete their W-4. See the W-4 section for requirements for nonresident aliens.

Some nonresident alien student employees may be FICA tax exempt for a period of time when first coming to the United States. See the FICA discussion below for further details.

W-4 Completion

If an employee is a nonresident alien, based on the SPT, the individual is required by Internal Revenue Code to complete his/her W-4 as follows:

  • Regardless of the individual’s marital status, a nonresident alien must indicate "single" on line 3.
  • Regardless of the number of actual dependents, a nonresident alien must indicate only "1" personal exemption on line 5.
  • A nonresident alien may not claim "Exempt" on Line 7.

Exceptions to the general W-4 completion rule include:

Nonresident aliens from Canada, Mexico, America Samoa and Northern Mariana Islands may also file:

  • Single
  • Spouse/Dependents same as a U.S. citizen
  • Extra amount per pay as noted in 3 above
  • May not claim "Exempt" on Line 7

Nonresident aliens from Japan and Republic of Korea may also file:

  • Single
  • Spouse/Dependents same as a U.S. citizen if they live with the individual in the U.S.
  • Extra amount per pay as noted in 3 above
  • May not claim "Exempt" on Line 7

Nonresident alien STUDENT (studying on an F-1, J-1, M-1 or Q-1 visa only) from India may also file:

  • Single
  • Additional dependent for spouse and an additional dependent for any child born in the U.S.
  • No Extra amount per pay required (additional amount a sole option of individual)
  • May not claim "Exempt" on Line 7

If a W-4 is not obtained or is completed other than noted above, the University must withhold at Single, 0 exemptions and no extra money taken out until a corrected W-4 is received from the individual.

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FICA Exemption

Under Section 3121(B)(19) of the Internal Revenue Code an individual may be exempt from FICA if he/she meets all three of the following criteria:

  • Individual is a nonresident alien based on the Substantial Presence Test (SPT)
  • The individual is in the U.S. on a F, J, M or Q visa
  • Individual is performing services within the individual’s primary purpose of his/her visa. (i.e. only F-1, J-1, M-1 and Q-1 visas are eligible)

If an individual meets all three criteria above, he/she and the University are exempt from paying FICA taxes from the time the individual is in the U.S., until the individual becomes a resident alien via the substantial presence test or via a "green card". Once the individual is a resident alien, FICA tax must be withheld retroactively back to January 1st or the first day present in the U.S. as a resident alien for tax purposes during the year his/her residency status changed to a resident alien.

It is the University’s policy that based on the individual’s residency change date calculated during the Substantial Presence Test, if the individual will become a resident alien during the current calendar year, the University will begin withholding FICA tax (employee and employer amount) as of January 1st of the current calendar year.

Alternative FICA Exemption

Nonresident and resident alien University student employees that may not be eligible for Section 3121(B)(19) of the Internal Revenue Code may be eligible for FICA exemption under Section 3121(B)(10), the "student FICA exemption." Conditions for Section 3121(B)(10) are the same for nonresident and resident aliens as for U.S. citizens.

If an individual is eligible for both Section 3121(B)(19) and Section 3121(B)(10) exemptions, the University will grant the 3121(B)(19) exemption since this will cover the entire period the individual is a nonresident alien instead of the time the individual is working while a full time student as granted by Section 3121(B)(10).

Tax Rate

With the exception of being limited on what a nonresident alien can claim on their W-4 and the possibility of FICA tax exemption for certain visa types, a nonresident alien’s payroll compensation is taxed the same way as a U.S. citizen or resident alien. Taxes are withheld at a graduated rate and reportable on the individual’s W-2 at year-end.

Tax Treaty Exemption

The U.S. government has entered into tax treaty agreements with various countries. Anyone who would like to claim a tax treaty exemption must make an appointment with the Bucknell Payroll Office. Tax treaty eligibility and benefits vary between treaties. See IRS Publication 901 for the list of treaty countries.

The individual must provide a completed IRS Form 8233. Form 8233 is valid for only the current calendar year. A new Form 8233 must be submitted every year. A Form 8233 is also only valid for one type of income. Thus if an individual files a Form 8233 for tax exemption on compensation through Payroll, this form does not cover any other type of payment. The only exception is that if an individual knows at the time of Form 8233 completion that he/she will be able to claim treaty exemption for compensation through Payroll and will be receiving a scholarship, both types of payment can be claimed on the same Form 8233. If Form 8233 is completed for compensation and the person later determines they are eligible for exemption for a scholarship he/she must either 1) complete a new Form 8233 claiming both the compensation and the scholarship or 2) complete a Form W-8BEN to claim a treaty exemption on the scholarship. See the Scholarships/Fellowships section for Form W-8BEN discussion.

In addition to Form 8233, a nonresident alien student/trainee must also provide additional statements and information set forth in Revenue Procedures 87-8, 93-22 and 93-22A. Nonresident alien teachers and researchers must provide additional statements and information set forth in Revenue Procedures 87-9, 93-22 and 93-22A. Sample statements may be found in IRS Publication 519. Form 8233 will not be accepted from student/trainees or teachers/researchers without the additional statements.

All individuals requesting a tax treaty exemption must also complete a Foreign National Tax Treaty Information Questionnaire along with updating his/her Foreign National Tax Information Questionnaire currently on file in the Payroll Office. All Form 8233 must contain the individual’s Individual Tax Identification Number (ITIN). An ITIN can be obtained by filing an application Form W-7 with the Internal Revenue Service (IRS).

Acceptance of the Form 8233 by the University does not mean the University will provide the individual with the tax treaty benefit. Once a completed Form 8233 is obtained and reviewed, based on the information given on the forms, the Payroll Office will decide within 5 days of receiving the completed forms, whether or not to "file" the treaty exemption. If the Payroll Department has knowledge that any of the information received from the individual is incorrect or if based on the information received, they do not believe that the person is eligible for a treaty exemption, Payroll will not "file" the treaty exemption. Payroll will notify the individual of the denial and continue to withhold taxes at the "normal" rate.

A denial to file by the University does not constitute a denial of the treaty benefit to the individual. If the individual feels he/she is eligible for the tax treaty benefit, he/she is able to file the tax treaty exemption on his/her annual tax return.

The tax treaty benefit will not be effective until 10 days after it is faxed/mailed to the IRS. During these 10 days, the Payroll Office will continue to withhold tax at the non-treaty benefit rate. If after ten days, the IRS does not notify the Payroll Office that the tax treaty benefit has been denied, the Payroll Office will adjust the individual’s records to take the new tax treaty exemption into affect when calculating taxes. The Payroll Office will send a copy of the Form 8233 to the individual. Only a copy of the Form 8233 signed by an authorized University agent will be evidence that the University has granted and the IRS has not denied the tax treaty benefit. If the IRS notifies the Payroll Office of a denial, the Payroll Office will notify the individual of the denial and continue to withhold taxes at the normal rate. Income exempted by a tax treaty is reportable to the IRS and the individual on a Form 1042-S at year-end.

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SCHOLARSHIPS/FELLOWSHIPS

Foreign National Tax Information Questionnaire

All nonresident alien students must complete the Foreign National Tax Information Questionnaire prior to receiving any payments from the University including University scholarship. The Questionnaire will be provided to the new student at a meeting held by the International Student Advisor prior to the beginning of the first semester of classes.

After the initial Questionnaire, only nonresident students that have used the five-year limit of "exempt days" for the Substantial Presence Test (SPT) will be required to complete an updated Questionnaire on an annual basis. The forms will be distributed to applicable students during November of each year and must be returned to the Payroll Office. Near the beginning of each calendar year, the Payroll Office will perform the SPT for all applicable students to determine residency status for the upcoming calendar year.

Substantial Presence Test (SPT)

The Finance Office will use the information from the Questionnaire to perform the SPT to determine whether the individual is a resident alien or a nonresident alien for tax purposes. If the individual is determined to be a resident alien for tax purposes based on the SPT, any scholarship/fellowship is treated the same as a U.S. citizen. Although the amount may be taxable to the individual, the University as the withholding agent does not have any responsibility to withhold or report the tax amount. If the individual is determined to be a nonresident alien for tax purposes based on the SPT, the scholarship/fellowship may be taxable at a rate of 14 or 30 percent.

Under Internal Revenue Code scholarships must be classified into three categories for tax purposes. Scholarships must be broken into "qualified" scholarship, "non-qualified" scholarship and "compensation for services" scholarship. "Qualified" and "non-qualified" scholarships are discussed below. "Compensation for services" scholarship is any amount of scholarship in which the recipient has provided or will provide a service in return for the scholarship. All "compensation for services" scholarships must be paid through Payroll and will be taxed under the Payroll policy.

According to Internal Revenue Code scholarships that do not qualify for tax exemption as a "qualified" scholarship under Section 117 are taxable to U.S. citizens, resident aliens and nonresident aliens. If an individual receiving Bucknell University scholarship is a nonresident alien for tax purposes based on the SPT, any Bucknell scholarship over the "qualified" amount (tuition, required fees and health insurance) is taxable and the Internal Revenue Code requires the University to withhold, remit and report this tax. Items that do not fall under a "qualified" scholarship include but is not limited to room, board, and any travel assistance given to the student. See IRS Publication 520 for more information on the taxability of scholarships/fellowships.

Tax Rate

Uncollected tax on a nonresident alien’s "unqualified" scholarship is the liability of the University. If the individual is on an F, J, M, or Q visa the amount is taxable at 14%; if on any other visa, the amount is taxable at 30%. If the individual is a U.S. citizen or a resident alien for tax purposes the scholarship is still taxable, but the University has no responsibility/liability to withhold, remit or report the tax. The individual is responsible to claim the tax on his/her tax return. The tax withholding associated with non-compensation scholarships will be added to the students billing account after the scholarship is applied.

Taxable scholarship/fellowship information is reportable to the IRS and the individual on a Form 1042-S at year-end.

Tax Treaty Exemption

The U.S. government has entered into tax treaty agreements with various countries. Anyone who would like to claim a tax treaty on a non-service scholarship/fellowship must complete a Form W-8BEN and bring the form to the Payroll Office. Individuals filing a W-8BEN must have a Social Security Number (SSN) or, for individuals who are not eligible for a SSN, an Individual Taxpayer Identification Number (ITIN). SSNs and ITINs maybe be applied for using Form SS-5 and Form W-7 respectfully. Income exempted by a tax treaty is reportable to the IRS and the individual on a Form 1042-S at year-end.

For "compensation for services" scholarships/fellowships, see the Tax Treaty Exemption section under Payroll.

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DEFINITIONS

Foreign Individual

An individual that is not a U.S. citizen. May be referred to as a foreign national, resident alien, nonresident alien, or non-U.S. citizen depending on the situation or government agency's definition.

"Green Card" Test

One of two tests used to indicate whether a non-U.S. citizen should be classified as a resident alien for tax purposes. The individual is classified as a resident alien for tax purposes if he/she is a lawful permanent resident (has a green card)

Individual Taxpayer Identification Number (ITIN)

A number issued by the Internal Revenue Service (IRS) to individuals that are not eligible for a Social Security Number (SSN). All individuals receiving payments from the University (unless payment is for travel reimbursement only) must have either a SSN or an ITIN. ITIN may be applied for using Form W-7.

IRS

Internal Revenue Service

I-20

Additional form required for entry into the U.S. by an individual on a J visa. The sponsoring organization of the individual coming to the U.S. must file the IAP-66. In the future, this will be known as the DS-2019.

DS-2019

Additional form required for entry into the U.S. by an individual on a J visa. The sponsoring organization of the individual coming to the U.S. must file the DS-2019.

I-94 Arrival/Departure Record

Small white INS card in an individual's passport. Received when entering the U.S. Once in the U.S. this document determines an individual's "status," not their Visa.

Nonresident Alien for Tax Purposes

Any non-U.S. citizen who does not meet either the green card test or the substantial presence test. Different tax rules apply to nonresident aliens than apply to U.S. citizens and resident aliens. (IRS term)

Resident Alien

Individual who has legal privilege to live and work in the U.S. permanently. (A permanent resident alien or green card holder.) (INS term)

Resident Alien for Tax Purposes

Individual who has passed either the green card test or the substantial presence test. Individual is treated as a resident alien for tax purposes (the individual pays taxes the same way as a U.S. citizen.) (IRS term)

Substantial Presence Test (SPT)

One of two tests used to indicate whether a non-U.S. citizen should be classified as a resident alien for tax purposes. This is a two-part test:

31 day test - a non-U.S. citizen must be in the U.S. for 31 days during the current year; AND

183 day test - a non-U.S. citizen must be in the U.S. for 183 days during the current + previous two calendar years.

Human Resources and/or the Finance Office will complete these tests based on information obtained on the Foreign National Tax Information Questionnaire. If an individual meets both parts, he/she will be considered a resident alien for tax purposes. This does not affect the individual's immigration status. This is for tax purposes only. For more information on the SPT, see U.S. Tax Publication 515 or 519 (links are provided under the Publication Section.)

U.S. Citizen

Usually used to describe someone born in the U.S. or to U.S. citizen parents. Also refers to an individual that has gone through the naturalization process. (both an INS and IRS term)

USCIS

US Citizen and Immigration Services

Visa

Document obtained by a non-U.S. citizen to enter the U.S. The Visa is used to enter the U.S. Once here, the individual will receive an I-94 which will become the individual's "status" document.

 

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FORMS

Foreign National
Tax Information Questionnaire
(pdf)

Internal form used by Bucknell University to obtain the necessary information from non-U.S. citizens to determine their residency for tax purposes.

Foreign National
Tax Treaty Information Questionnaire
(pdf)

Internal form used by Bucknell University to obtain information of previous tax treaty exemptions. This form must accompany Form 8233 or W-8BEN.

SS-5 (pdf)

Application for Social Security Number (SSN)

W-4 (pdf)

Employee's Withholding Allowance Certificate

W-7 (pdf)

Application for IRS Individual Taxpayer Identification Number (ITIN)

Form 8233 (form) (pdf)
Form 8233 (instructions) (pdf)

Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual

W-8BEN (form) (pdf)
W-8BEN (instructions) (pdf)

Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding

W-8ECI (form) (pdf)
W-8ECI (instructions) (pdf)

Certificate of Foreign Person's Claim for Exemption From Withholding on Income Effectively Connected With the Conduct of a Trade or Business in the United States

W-8EXP (form) (pdf)
W-8EXP (instructions) (pdf)

Certificate of Foreign Government or Other Foreign Organization for United States Tax Withholding

W-8IMY (form) (pdf)
W-8IMY (instructions) (pdf)

Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding

W-9 (pdf)

Request for Taxpayer Identification Number and Certification

 

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INTERNAL REVENUE SERVICE (IRS) PUBLICATIONS

Publication 515 (pdf) -- Withholding of Tax on Nonresident Aliens and Foreign Corporations

Publication 519 (pdf) -- U.S. Tax Guide for Aliens

Publication 970 (pdf) -- Scholarships and Fellowships

Publication 901 (pdf) -- U.S. Tax Treaties

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PAYMENT AUTHORIZATION MATRIX

VISA TYPE

PAYMENT TYPE

PAYMENT ALLOWED

PAYMENT TAXABILITY

B-1

Employment

NO

Payment Not Allowed

Honorarium

YES - if individual will be at the University for less than 9 days and individual may not accept payments from more than 5 institutions in last 6 months

30% of payment made through Accounts Payable

Travel Reimbursement

YES - if payment would be reimbursable under "accountable plan." Receipts required.

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement classified as an Honorarium and allowable only if meet criteria noted under Honorarium. Amount taxed at 30% through Accounts Payable. Reimbursement reduced by tax amount.

B-2

Employment

NO

Payment Not Allowed

Honorarium

YES - if individual will be at the University for less than 9 days and individual may not accept payments from more than 5 institutions in last 6 months.

30% of payment made through Accounts Payable

Travel Reimbursement

YES - if individual will be at the University for less than 9 days and individual may not accept payments from more than 5 institutions in last 6 months, and if payment would be reimbursable under "accountable plan." Receipts required.

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement classified as an Honorarium and allowable only if meet criteria noted under Honorarium. Amount taxed at 30% through Accounts Payable. Reimbursement reduced by tax amount.

F-1

Employment

YES - On campus employment allowed if student is attending the University-limit 20 hours per week while classes are in session.

Graduated rates, W-4 restrictions

Scholarships

YES

14%

Travel Reimbursement

YES

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement taxed at 14% through Accounts Payable. Reimbursement reduced by tax amount.

H-1B

Employment

YES - if sponsored by Bucknell.

Graduated rates, W-4 restrictions

Honorarium

YES - ONLY if sponsored by Bucknell.

Payment must be made through Payroll. Taxed at graduated rates and W-4 restrictions.

Travel Reimbursement

YES

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement made to an H1-B sponsored by Bucknell, the amount will be paid through Payroll as additional compensation and taxed at graduated rates and W-4 restrictions.

Any non-business or unsupported reimbursement for an H1-B not sponsored by Bucknell - Payment not allowed.

J-1 Student

Employment

YES - On campus employment allowed if student is attending the University-limit 20 hours per week if classes are in session.

Graduated rates, W-4 restriction.

Honorarium

YES - if not sponsored by Bucknell, must have additional approvals.

30%

Scholarships

YES - if not sponsored by Bucknell, must have additional approvals.

30%

Travel Reimbursement

YES

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement taxed at 14% through Accounts Payable. Reimbursement reduced by tax amount.

J-1 Non-student

Employment

YES - if sponsored by Bucknell

Graduated rates, W-4 restrictions

Honorarium

YES - if not sponsored by Bucknell, must have additional approvals.

30% of payment made through Accounts Payable

Travel Reimbursement

YES

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement taxed at 30% through Accounts Payable. Reimbursement reduced by tax amount.

TN

Employment

YES - Bucknell must be listed petitioner.

Graduated rates, W-4 restrictions

Independent Contractor

YES - Bucknell must be listed petitioner.

30% of payment made through Accounts Payable

Honorarium

YES - Bucknell must be listed petitioner.

Payment must be made through Payroll. Taxed at graduated rates and W-4 restrictions.

Travel Reimbursement

YES

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement made to a TN petitioned by Bucknell, the amount will be paid through Payroll as additional compensation and taxed at graduated rates and W-4 restrictions.

Any non-business or unsupported reimbursement for a TN not petitioned by Bucknell - Payment not allowed.

WB/WT

Employment

NO

Payment Not Allowed

Honorarium

YES - if individual will be at the University for less than 9 days and individual may not accept payments from more than 5 institutions in last 6 months.

30% of payment made through Accounts Payable

Travel Reimbursement

YES - if individual will be at the University for less than 9 days and individual may not accept payments from more than 5 institutions in last 6 months.

If University business related and receipts included- Not Taxable.

Any non-business or unsupported reimbursement classified as an Honorarium and allowable only if meet criteria noted under Honorarium. Amount taxed at 30% through Accounts Payable. Reimbursement reduced by tax amount.

 

If Visa type or payment type is not listed above, departments must contact the General Counsel's Office or Finance Office for legality of payment to the individual prior to notifying or contracting with the individual for payment. Payments not allowed by Federal Immigration Regulations will not be made. Bucknell University will not reimburse any payments (lodging, meals, travel, fees, etc.) made to or on behalf of any foreign individuals through personal funds.

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