SCHOLARSHIP/FELLOWSHIP PAYMENTS TO NONRESIDENT ALIENS STATE AND UBF FUNDED.

SCHOLARSHIP/FELLOWSHIP SCHOLARSHIP/FELLOWSHIP PAYMENTS TO NONRESIDENT PAYMENTS TO NONRESIDENT

ALIENSALIENS STATE AND UBF FUNDEDSTATE AND UBF FUNDED

NONRESIDENT ALIENNONRESIDENT ALIEN

This term is used for Tax purposes This term is used for Tax purposes not Immigrationnot Immigration

As a general rule F-1 and J-1 students As a general rule F-1 and J-1 students who have been in the U.S. 5 calendar who have been in the U.S. 5 calendar years or less.years or less.

J-1 non-students who have been in J-1 non-students who have been in the U.S. no more than 2 out of the the U.S. no more than 2 out of the last 6 years.last 6 years.

DEFINITIONSDEFINITIONS

Types of PaymentsTypes of PaymentsScholarship/Fellowship: Amount given to an Scholarship/Fellowship: Amount given to an

individual to aid in study, training, or individual to aid in study, training, or research and which does not require work research and which does not require work to be performed to receive the money.to be performed to receive the money.

Prizes and Awards: Amount received Prizes and Awards: Amount received primarily in recognition of religious, primarily in recognition of religious, charitable, scientific, educational, artistic, charitable, scientific, educational, artistic, literary, or civic achievement or received literary, or civic achievement or received as the result of entering a contest.as the result of entering a contest.


Qualified Expenses: Tuition, comprehensive Qualified Expenses: Tuition, comprehensive fees, student activity fees, and direct fees, student activity fees, and direct billed course and program fees. billed course and program fees.

Required books, supplies, and equipment: Required books, supplies, and equipment: Qualified expenses for student athletes, Qualified expenses for student athletes, EMBA, PMBA, and dental school students .EMBA, PMBA, and dental school students .

No tax withholding or reporting for qualified No tax withholding or reporting for qualified expenses as long as payments are not expenses as long as payments are not made directly to the individual. made directly to the individual.


Nonqualified Expenses: Room and board, Nonqualified Expenses: Room and board, travel and any payments made above and travel and any payments made above and beyond the cost of the qualified expenses. beyond the cost of the qualified expenses. This includes state fellowships paid This includes state fellowships paid directly to the student.directly to the student.

Subject to federal tax withholding of 14%, Subject to federal tax withholding of 14%, unless there is an applicable tax treaty unless there is an applicable tax treaty exemption.exemption.

INTRODUCTIONINTRODUCTION

IRS regulations state that nonqualified IRS regulations state that nonqualified scholarship payments to nonresident scholarship payments to nonresident aliens must be taxed.aliens must be taxed.

The tax rate is 14% for students on F-1 The tax rate is 14% for students on F-1 and J-1 visas.and J-1 visas.

Nonresident aliens should be issued a Nonresident aliens should be issued a 1042-S statement at year end.1042-S statement at year end.

The 1042-S is a statement issued to The 1042-S is a statement issued to nonresident aliens which reports various nonresident aliens which reports various income and tax withholdings. income and tax withholdings.

CURRENTLYCURRENTLY

State funded- no tax withholding or State funded- no tax withholding or reportingreporting

Payments are paid from various Payments are paid from various areas (e.g. Accounts Payable, areas (e.g. Accounts Payable, Financial Services, UBF, etc).Financial Services, UBF, etc).

Qualified and nonqualified expenses Qualified and nonqualified expenses are treated the same.are treated the same.

NONRESIDENT ALIEN NONRESIDENT ALIEN SCHOLARSHIP/FELLOWSHIP SCHOLARSHIP/FELLOWSHIP

VOUCHERVOUCHER SEPARATE instructions for completing and MAILING formsSEPARATE instructions for completing and MAILING forms Scholarship/Fellowship VoucherScholarship/Fellowship Voucher Request for InformationRequest for Information Voucher for State and UBF scholarships can be found at the SRC Voucher for State and UBF scholarships can be found at the SRC

office website: office website: http://src.buffalo.edu/office/officeforms/generalforms.shtmlhttp://src.buffalo.edu/office/officeforms/generalforms.shtmlor on the UBBusiness website:or on the UBBusiness website:www.ubbusiness.buffalo.edu www.ubbusiness.buffalo.edu under “Administrator” > “Payments” > “State Scholarship under “Administrator” > “Payments” > “State Scholarship Voucher”Voucher”

Information regarding State fellowships can also be found at the Information regarding State fellowships can also be found at the Financial Services website: Financial Services website: http://ubbusiness.buffalo.edu/ubb/cfm/policies/http://ubbusiness.buffalo.edu/ubb/cfm/policies/or on the UBBusiness website: www.ubbusiness.buffalo.eduor on the UBBusiness website: www.ubbusiness.buffalo.eduunder “Administrator” > “Payments” > “State Fellowship under “Administrator” > “Payments” > “State Fellowship Voucher”Voucher”

INSTRUCTIONS FOR INSTRUCTIONS FOR COMPLETING FORMSCOMPLETING FORMS

Forms should be used for scholarships/fellowships paid with Forms should be used for scholarships/fellowships paid with State or UBF funds to nonresident aliens.State or UBF funds to nonresident aliens.

Research Foundation will continue to follow their current Research Foundation will continue to follow their current procedures.procedures.

Both the voucher and request for information must be Both the voucher and request for information must be completed.completed.

State fellowship forms ONLY should be sent directly to State fellowship forms ONLY should be sent directly to Amanda Maines at 120 Crofts Hall.Amanda Maines at 120 Crofts Hall.

All other vouchers should be sent directly to Student All other vouchers should be sent directly to Student Academic Records and Financial Services (SARFS).Academic Records and Financial Services (SARFS).

Refunds will be issued by SARFS, the student must Refunds will be issued by SARFS, the student must complete the “Request for Refund Form” found at the SRC complete the “Request for Refund Form” found at the SRC student website: student website: http://src.buffalo.edu/pdf/requestforrefund.pdfhttp://src.buffalo.edu/pdf/requestforrefund.pdf..

NONRESIDENT ALIEN NONRESIDENT ALIEN SCHOLARSHIP/FELLOWSHIP VOUCHERSCHOLARSHIP/FELLOWSHIP VOUCHER

REQUEST FOR INFORMATIONREQUEST FOR INFORMATION

TAX TREATIESTAX TREATIES

There are 41 countries that have tax There are 41 countries that have tax treaties for scholarship income.treaties for scholarship income.

Treaty eligibility (W-8BEN) Treaty eligibility (W-8BEN) SSN or ITIN (Individual Taxpayer SSN or ITIN (Individual Taxpayer

Identification Number)Identification Number)

ITINITIN

Applying for an ITINApplying for an ITIN Social security numbers are only Social security numbers are only

issued for employment.issued for employment. No ITIN = 14% taxNo ITIN = 14% tax Treaty Eligible + SSN/ITIN = 0% taxTreaty Eligible + SSN/ITIN = 0% tax

STATE FELLOWSHIP STATE FELLOWSHIP PROCEDUREPROCEDURE

Complete voucher for state nonresident alien Complete voucher for state nonresident alien fellowships. Process all others through fellowship fellowships. Process all others through fellowship application.application.

All State fellowship payments will be made All State fellowship payments will be made biweekly.biweekly.

Additional information requiredAdditional information required• Begin and end check dateBegin and end check date• Check sort codeCheck sort code

Forward completed voucher and request for Forward completed voucher and request for information to Amanda Maines, 120 Crofts Hall.information to Amanda Maines, 120 Crofts Hall.

Please see the following website for more Please see the following website for more information information http://ubbusiness.buffalo.edu/ubb/cfm/policies/http://ubbusiness.buffalo.edu/ubb/cfm/policies/

SCHOLARSHIP PROCEDURESCHOLARSHIP PROCEDURE Department completes -Scholarship/ Department completes -Scholarship/

Fellowship Voucher Fellowship Voucher Student completes - Request for Student completes - Request for

Information and must sign the student Information and must sign the student certification on the vouchercertification on the voucher

All vouchers will be sent to Student All vouchers will be sent to Student Academic Records and Financial Services Academic Records and Financial Services (SARFS).(SARFS).

If the form is sent to Financial Services or If the form is sent to Financial Services or UBF first it will be forwarded to SARFS and UBF first it will be forwarded to SARFS and further delay the processing.further delay the processing.

SCHOLARSHIP PROCEDURESCHOLARSHIP PROCEDURE

SARFS will determine the qualified and SARFS will determine the qualified and nonqualified amounts based on the nonqualified amounts based on the student’s account.student’s account.

The voucher and request for information The voucher and request for information will then be sent to either UBF or the State will then be sent to either UBF or the State payroll department.payroll department.

STATE SCHOLARSHIP STATE SCHOLARSHIP PROCEDUREPROCEDURE

SARFS State Payroll/Financial SARFS State Payroll/Financial ServicesServices

Qualified Amount Qualified Amount Financial Services SARFSFinancial Services SARFS

Nonqualified Amount Net TaxesNonqualified Amount Net TaxesState Payroll SARFSState Payroll SARFS

Students with a credit balance on their Students with a credit balance on their account can complete a “Request for account can complete a “Request for Refund Form”, which can be found at Refund Form”, which can be found at http://src.buffalo.edu/pdf/requestforrefund.pdfhttp://src.buffalo.edu/pdf/requestforrefund.pdf

UBF SCHOLARSHIP UBF SCHOLARSHIP PROCEDURESPROCEDURES

SARFS UBFSARFS UBF Qualified AmountQualified Amount

UBF SARFSUBF SARFS Nonqualified Amount Net TaxesNonqualified Amount Net Taxes

UBF SARFS UBF SARFS Students with a credit balance on their Students with a credit balance on their

account can complete a “Request for account can complete a “Request for Refund Form”, which can be found at Refund Form”, which can be found at http://src.buffalo.edu/pdf/requestforrefund.pdfhttp://src.buffalo.edu/pdf/requestforrefund.pdf

RF PROCEDURESRF PROCEDURES The process for utilizing RF funds for The process for utilizing RF funds for

payments to nonresident alien’s has not payments to nonresident alien’s has not changed.changed.

The RF does not pay students directly.The RF does not pay students directly. All payments for tuition remission are All payments for tuition remission are

remitted directly to SARFS.remitted directly to SARFS. Tuition remission is requested by Tuition remission is requested by

completing and submitting a Grant Billing completing and submitting a Grant Billing Form.Form.

Salary and fellowship payments are Salary and fellowship payments are processed through the payroll mechanism processed through the payroll mechanism and are therefore taxed accordingly.and are therefore taxed accordingly.

TIPSTIPS

IRS Publication No. 515, “Withholding of IRS Publication No. 515, “Withholding of tax on Nonresident Aliens and Foreign tax on Nonresident Aliens and Foreign Entities” at Entities” at http://www.irs.gov/pub/irs-pdf/p515.pdfhttp://www.irs.gov/pub/irs-pdf/p515.pdf

State processing may take 4-6 weeks to State processing may take 4-6 weeks to complete from the start of the semester complete from the start of the semester due to the State payroll cycledue to the State payroll cycle

Multiple awards- First come, first serveMultiple awards- First come, first serve Notification of changes to student’s Notification of changes to student’s

registration after the award has been registration after the award has been processed should be done immediatelyprocessed should be done immediately

TIPSTIPS

ReceiptsReceipts Income Tax ReturnIncome Tax Return ISSS website ISSS website

http://wings.buffalo.edu/intlservices/index.htmlhttp://wings.buffalo.edu/intlservices/index.html

CONTACTSCONTACTS

Foreign National Tax Unit SARFSAmanda Maines Kellie Kostek

[email protected] [email protected]

645-5000 ext. 1286 645-5683

UBF Financial ServicesElaine Schaffer Carrie Grimshaw

[email protected] [email protected]

645-3013 645-5000 ext. 1338

QUESTIONS?QUESTIONS?

THANK YOU!THANK YOU!

SCHOLARSHIP/FELLOWSHIP PAYMENTS TO NONRESIDENT ALIENS STATE AND UBF FUNDED.

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