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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3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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

3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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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3/2/05

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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