Panel of Presenters Payroll Anita Gurule OPAA Lisa Silbernagel
FA&A Rae Lee Aguilar Vendor Maintenance Mary Page Paying NRAs
and Foreign Businesses W8s and Heartbreaks
Slide 2
Presentation - Outline Who is our expert panel? Who Qualifies
as an Non-Resident Alien? What are typical payments made to NRAs?
What FIS Policy has changed? 413: Non-Resident Aliens (NRA) What
new materials are available? Payroll, Fellowships, Foreign
Entities, Honorarium and Travel. Q + A Please hold questions until
the end of the presentation
Slide 3
Name of DepartmentResponsibilitiesContact PersonE-Mail Address/
OfficePhone Number Finance Accounting & Analysis Payment for
Services &Travel Siora Arce [email protected] 100 Kerr
Administration Bldg (541)737-0637 Human Resources Employment and
Affiliate/Courtesy Faculty members Business Centers
http://oregonstate.edu/fa/bc or visit https://oscar.oregonstate.edu
(541) 737-2447 International Student & Faculty Services (ISFS)
Visas/Advise Charlotte Ross [email protected] Snell
Hall 444 (541) 737-6475 International Student &Faculty Services
(ISFS) Visas/Advice Jackie Bangs [email protected] Snell
Hall 444 (541)737-6468 Payroll OfficeWage, payroll Anita Gurule
[email protected] B106 Kerr Administration Bldg (541)
737-0573 Post Award Administration Fellowships (Stipends) Lisa
Silbernagel [email protected] B306 Kerr
Administration Bldg (541) 737-9585 Vendor Maintenance Mary Page
[email protected] B306 Kerr Administration Bldg (541)
737-0623 Social Security OfficeIssues SSN and Form SS-5 Main Office
http://www.ssa.gov/ 1055 Bain St SE Albany, OR 97322
(1-800-772-1213) ProcurementPersonal Service Contracts Tamara
Bronson [email protected] Property Services Building
PACS (541) 737 8044 Non-Resident Alien Resources at OSU
Slide 4
You are considered a non resident alien if you can NOT meet one
of the following two tests for the calendar year: Green Card Test
Substantial Presence Test You must have been physically present in
the United States on at least: 31 days during the current year, and
183 days during the 3 year period that includes the current year
and the 2 years immediately before. To satisfy the 183 days
requirement, count: All of the days you were present in the current
year, and One-third of the days you were present in the first year
before the current year, and One-sixth of the days you were present
in the second year before the current year. Who Qualifies as a Non
Resident Alien?
Slide 5
Wages/Compensation Stipends Travel & Expense Reimbursements
Scholarships/Fellowships (Note: Payments do not have to be paid in
cash; credits to a student's account qualify under these
requirements.) Independent Contractor Payments
Royalties/Commissions Each payment requires the review of certain
key factors: Visa Type, Residency Status, Substantial Presence
Test. Examples of Payments made to NRAs
Slide 6
FIS Policy Changes? 413: Non-Resident Aliens (NRA) 413-01:
Payment for Services and Travel 413-02: University Employment
413-03: Scholarships and Fellowships 413-04: Foreign
Businesses
Slide 7
Honorariums A compensation payment of money for the persons
participation in a usual academic activity or activities. Includes
lecturing, teaching, consulting, conducting research, attending
meetings or seminars or otherwise sharing knowledge. 9/5/6 rule
Honorarium must be from no more than 5 institutions within a 6
month period for usual academic activities lasting for not more
than 9 days. The 9 days is the time limit for each visit Only the
days when the NRA engages in the academic activities during the
visit are counted against the 9 days OSU can be institution #5- but
not #6 for application of these rules. Allowable Visa Types w/
restrictions B1/VWB and the B2/VWT- do not need visa sponsor, can
be paid an honorarium and associated expenses for usual academic
activities, subject to restrictions. (the 9-5-6 rule) Honorarium
Taxability Payments are subject to federal income tax withholding
at 30% unless specifically exempted by an income tax treaty. Tax
Treaties United States has tax treaties with over 50 countries.
Each treaty is unique To claim tax treaty exemption appropriate
documentation must be provided. Financial Accounting &
Analysis
Slide 8
Travel Reimbursements Travel expenses incurred with an OSU
business purpose ; such as airfare, rental car, ground
transportation, meal per diems, lodging, etc. may be reimbursed.
Travel expenses with proper documentation and receipts are not
subject to tax withholding. Documentation must follow OSU Travel
Policy FIS-411. Refer to policy for guidance. In some rare cases,
NRAs may not be eligible to receive a travel reimbursement based on
immigration regulations. Therefore, prior to extending an offer to
reimburse expenses verify NRA is eligible. A1/A2 visa types not
eligible per INA Section 212(q) The 9/5/6 rule applies to travel
reimbursements also. FA&A Continued
Slide 9
Flow Chart
Slide 10
Payroll Central Payroll and the OUS Controllers office use the
CO-NRA to determine an employees tax status. The CO-NRA is required
for all Non-Resident Alien employees, including those with H1-B,
E3, and TN visas. Required on initial hire, renewed annually, and
when a change in status. (Example: Visa change, eclass change)
Copies of the I-94 and I-20 or DS-2019 must accompany the CO- NRA.
CO-NRA - Oregon University Systems Alien Information Request
Form
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Payroll Continued Box 3 - Single Box 5 0 or 1 Allowance
Exceptions for Canada, Mexico, Korea, and students from India
Non-Residents are not allowed to file EXEMPT (defaulted to single
0) Must have SSN. If no SSN received, leave blank and send copy of
receipt. Please refer to instructions at IRS site:
http://www.irs.gov/pub/irs-pdf/n1392.pdf Non-Resident Alien W-4
Filing REQUIREMENT
Slide 12
Payroll Continued More than 46 available tax treaties
available. Not guaranteed that an employee is eligible for a tax
treaty. Country and status type (teaching / research vs. student /
trainee) specific. The 8233 must be accompanied by an Attachment
Letter (Attachment Letters are available in the Central Payroll
Office.) More information concerning tax treaties is available in
IRS Publication 901. Tax Treaties - Form 8233
Slide 13
Foreign Entities If you are paying a Stipend, Payment for
Services or Travel Reimbursement for a foreign individual then you
need to use the Policy 413 Payments to Non-Resident Aliens. Payers
are responsible for requesting a Form W-8 from any business
entities that are presumed, or otherwise believed to be foreign.
The foreign entity is responsible for determining which of the four
IRS W-8 forms is appropriate for their business situation and the
form should be signed by a person authorized to sign W-8
forms.
Slide 14
Foreign Entities Continued PROCEDURE Is the payment for product
or goods provided outside of the US or for services performed
outside of the US? If YES, no reporting or withholding is
necessary. Collect the signed W-8 form and send with copy of
invoice to Vendor Maintenance and if services are being paid then
send PPSC to FA&A and a copy to Vendor Maintenance. If NO, then
withholding of taxes may be mandatory. Send the signed W-8 plus any
additional documentation such as PPSC, Copy Visa, Copy of Passport
to Vendor Maintenance.
Slide 15
W-8BEN Used primarily by entities and individuals to claim
foreign status or treaty benefits to establish that the Payee is
not a US entity. Is there a US reporting TAX ID Number? If yes,
then is part II completed claiming Treaty benefits? If so, then
payment is tax exempt if income is covered by an article in the
Treaty. All fields in line 10 must be completed to claim exemption
on royalty payments. If there is no Tax ID number, then payment is
subject to 30% withholding.
Slide 16
W-8ECI Used primarily by the payee or beneficial owner
indicating that the income that is listed on the form is
effectively connected with the conduct of a trade or business
within the United States. (The foreign parent company/organization
has a location inside the US from which product is sent or services
performed and that location does not have a separate US Tax ID
number.) If there is a US tax reporting number, the payment is
subject to 30% tax withholding unless there is a services income
listed on line 9. In that case, payment is exempt from withholding.
If there is not a services income listed on line 9 then we are
required to obtain from the entity a different type of W-8 form. If
there is no US tax reporting number, then payment is subject to 30%
withholding.
Slide 17
W-8EXP Used primarily by the following entities to claim
exemption from tax withholding: Foreign governments, foreign tax
exempt organizations, foreign private foundations, government of a
US possession, or foreign central bank of issue. These entities
must be claiming exemption under IRS Code 115(2) 501 89s, 895 94
1443(b). Otherwise they need to file a W-8BEN or W-ECI. Payment for
form, W-8EXP, is usually exempt from withholding
Slide 18
W-8IMY Used primarily by an intermediary, a withholding foreign
partnership, a withholding foreign trust or a flow through entity.
Copies of appropriate withholding certificates, documentary
evidence, and withholding statements must be attached to the
W-8IMY. Payment for form, W-8IMY, is usually exempt from
withholding.
Slide 19
Entities Flowchart
Slide 20
Paying STIPENDS for Students or Visiting Researchers Students
or visiting researchers who are to receive a living allowance only
not compensation for services may be paid a stipend Stipend
recipients are not considered employees nor independent contractors
payment is through vendor process and is considered subsistence
allowance Stipends cannot be paid from E&G funds except in very
rare circumstances in which prior approval has been granted
Slide 21
PAYING STIPENDS FOR Students or Visiting Researchers Cont
Stipends will be subject to tax withholding unless tax treaty is
claimed Treaty is claimed with IRS form W-8BEN valid through
December 31 of 3 rd succeeding calendar year Treaty can only be
claimed if NRA has a current SSN or ITIN
Slide 22
Reference Materials FIS policy 1402-17 IRS publications 901
& 515 (for withholding agents/employers) IRS publication 519
(for international visitors/taxpayers) PAYING STIPENDS FOR Students
or Visiting Researchers Cont