At the time a nonresident guest Lecturer or Researcher is invited to visit UNCP to give speeches, conduct workshops, or participate in seminars, he/she should be informed, by the individual extending the invitation, that certain personal information will be required in order for UNCP to determine what type payment may be made to them.
A Form NRA 001, (Foreign Visitor Information Form), should be sent to the visitor so that he/she may provide such information as U.S. Social Security Number or U.S. ITIN (Individual Taxpayer Identification Number); the type visa that will be used to enter the United States; his/her U.S. tax status and tax treaty benefits being requested. The form should be completed and returned immediately to UNCP, with copies of documents as listed at the top of the form.
If the NRA visitor does not have a U.S. Social Security Number or a U.S. ITIN, he/she should use Form W-7 (Application for IRS Individual Taxpayer Identification Number) to apply for the U.S. ITIN. The instructions for completing the form indicate what documents are required and where to send the application.
In late October 1998, the IRS changed its position relating to the rules for reimbursement or payments for travel expenses of nonresident aliens. Since that time, payments for travel expense made to or on behalf of nonresident alien independent contractors are not subject to tax withholding if the IRS accountable plan rules are used. This means that receipts and other documentation for the expenses must be submitted with the request for reimbursement or payment. UNCP Form TRV-1, (Travel Authorization/Expense Report.)
If the NRA is to be paid an honorarium, it is subject to 30% tax withholding. However, some countries have a tax treaty with the U.S., which may exempt the honorarium payment from tax withholding. If treaty benefits are to be requested, a Form 8233, (Exemption From Withholding On Compensation For Independent and Certain Dependent Personal Services of a Nonresident Alien Individual), should be sent to the visitor. That form needs to be completed and returned, with supporting documents (copy of Social Security card or ITIN card) to UNCP prior to the date of the visit. If the completed Form 8233 is accepted by UNCP, the Accounting Technician is required to send it to the Internal Revenue Service, International Returns Section, P.O. Box 920, Bensalem, PA 19020-8518. UNCP must wait at least 10 days after sending the form to the IRS before payment may be processed.
When the visitor arrives on campus, a copy of his/her visa and I-94 (Departure Record) needs to be sent to Payroll. If the visa and I-94 support the information already received (and the 10 day wait period has expired), payment can be processed to pay the NRA.
If the NRA enters the United States from a Visa Waiver Country or with TN (Trade NAFTA) status, they must present a copy of their I-94. In some instances they may have to request the I-94 at the port of entry if it is not issued by the immigration officer. At the end of the calendar year, Payroll will issue a Form 1042-S (Foreign Person's U.S. Source Income Subject to Withholding) to the NRA which will report the total amount of payments paid to the NRA and taxes withheld by UNCP.
Note: If the NRA is from a country that does not have a tax treaty with the United States, a Form 8233 will not be required. The NRA's payment will be subject to 30% withholding. UNCP will send this withheld tax to the IRS, and the NRA should complete a Form 1040-NR (U.S. Nonresident Alien Income Tax Return) at year-end. The Form 1040-NR will determine if the NRA owes additional tax or is entitled to a refund of previously withheld tax. Contact Jacqueline Strickland, 910.521.6284, for questions concerning US Tax treaties or the forms mentioned above.