Nonresident Alien Tax Information--Information for Departments
What should a department do when hiring an NRA?What if the NRA employee does not have a Social Security Number?
What must departments do when making payments through Accounting to NRA's?
What is the procedure for scholarship awards?
What is the procedure for prizes and awards?
What is the procedure for honorarium payments?
How does the nonresident file their tax return?
How can I learn more about the NRA taxation process at UMSL?
What should a department do when hiring an NRA?
When a department decides to hire an NRA who is already present in St. Louis, all routine "new hire" paperwork should be completed with no delay.
The W-4 must be completed with name, address, SSN and a signature and date. (The figures on the W-4 are irrelevant to the "new hire" process for an NRA.)
There is no requirement to have an SSN at the time of hire for a newly-arrived NRA.
The new employee should be directed to complete and submit the UM374 Tax Assessment Intake Form as soon after the hire as possible. The UM374 (Tax Assessment Intake Form) is available in as a pdf here.
Once the UM374 has been submitted, the employee must e-mail Sandy Crawshaw, the UMSL Nonresident Alien Taxation Specialist at scrawshaw@umsl.edu to schedule an appointment. The e-mail subject line should read, "New employee" and the body of the message should include several alternative times and days of availability for appointments. The employee will be notified as to the time and date of the appointment by reply e-mail.
The employee must bring their passport, all immigration documents, and their social security card (if they have one) to the appointment.
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What
if the NRA employee does not have a Social Security Number?
A Social Security number is not required from nonresident employees before
they are allowed to begin work. However, a Social Security number is required
before a foreign employee can benefit from a tax treaty exemption from
withholding.
On July 1, 2002, the Social Security Administration (SSA) was mandated
to verify Social Security number applicants with a U.S. Citizenship and
Immigration Services (USCIS) database. While modifications are being made
to the system to provide for more expeditious review, this process currently
may take several weeks.
Because of this new system,
the SSA suggests that newly-arrived nonresidents wait 10 days
after their U.S. arrival before submitting an application for
a Social Security number.
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What
must departments do when making payments through Accounting to NRA's?
Accounting will not be processing any payments for nonresident
aliens except those that are for a reimbursement of business-related expenses
in accordance with the "accountable plan."
All payments made to nonresident aliens other than wages and scholarships
paid through Financial Aid must go through the Nonresident Alien Taxation
Specialist and are to be submitted on the form UM376A (Non-Employee Alien PAF) (pdf) and the UM140
(On-Line Check Request) (xls).
See procedures for scholarship, prize, and honorarium recipients directly
below.
What is the procedure for scholarship awards?
There are currently two mechanisms to provide NRA scholarship payments at UMSL.
1. Departments submit the scholarship information to Financial Aid so the amount is applied directly to the student account (SIS) or
2. Departments submit forms UM376A and UM140 to the NRA Taxation Specialist so the payment is processed through PeopleSoft Payroll. (This is for scholarship recipients who are not enrolled students and for some student payments departments choose to process outside SIS. )
Nonqualified scholarships
are taxable income to both nonresidents and U.S. students. A taxable scholarship
is any amount greater than the semester academic fees or amounts provided
directly to the student in the form of cash or a check. Nonqualified scholarships
made to NRA students who have completed the UM374 tax assessment process
will generally be taxed at a maximum of 14% unless a tax treaty exemption
applies. If there is no tax assessment on file, withholding will be at
30% (required).
All NRA recipients must be provided with the UM374 immediately following
the departmental scholarship decision to facilitate completion of the
tax assessment process.
Students who have already completed the tax assessment process do not
need to submit the UM374 again. They must contact Sandy Crawshaw at scrawshaw@umsl.edu so the scholarship can be added to existing income information.
What
is the procedure for prizes and awards?
Prizes and awards are always considered U.S. source income for NRA's,
and withholding of U.S. taxes is required at 30% unless a tax treaty applies
and the recipient has either a U.S. Social Security Number or Individual
Taxpayer Identification Number (ITIN).
Recipients may complete and submit the UM374 from anywhere in the world,
and may submit copies of passport and identification documents via fax
at 314-516-5636 or by e-mail as a scanned attachment.
Departments must provide a completed UM376A and UM140 for each prize recipient.
What
is the procedure for honorarium payments?
1. Before arrival of the NRA, departments should contact
the NRA Tax Specialist at scrawshaw@umsl.edu with general information about the NRA and the nature of honorarium payment(s).
This will maximize tax benefits and allow anticipation of withholding
amounts by both the department and the NRA. Withholding will be 30% in
the absence of tax treay benefits.
2. The NRA must complete and submit the UM374, which
can be downloaded as a pdf here. To expedite the process, the form can be completed prior
to arrival in the United States. Visa information will be incomplete at
that time, so the NRA should estimate planned arrival and departure dates
and immigration status for purposes of the form submission.
3. After arrival of the NRA, an appointment must be scheduled
with the NRA Taxation Specialist and the NRA. The NRA must bring the following
documentation to the appointment:
a. Passport and all immigration documents (to verify eligibility for honorarium payment).
b. Evidence of SSN or ITIN, copy of application already submitted, or completed IRS W-7 (provided by the UMSL NRA Taxation Specialist).
4. Prior to the arrival of the NRA, if possible, the department must submit to the NRA Taxation Specialist the following documentation:
a. A copy of the contract signed by both Business Services and the NRA (if the amount of the honorarium requires a contract).
b. A completed UM378 (Supporting Statement for Honoraria and/or Reasonable Business Expenses Provided to a Nonresident Alien Admitted to the US.....).
c. A completed UM376A (no voucher is required for payments of this type).
d. A completed UM140 on-line check request.
5. During the tax assessment appointment, eligibility for tax treaty and
other exemptions will be determined and appropriate forms will be printed,
signed by the NRA, and forwarded to the IRS as needed.
6. Honorarium payments may be made only to a nonresident
alien who is in an immigration status that legally allows such payments.
These statuses generally include persons in B-1, B-2, WB, and WT status.
Because laws passed by Congress in 1998 currently conflict with INS policies
on honorarium payments, all UMSL NRA honorarium policies are in constant
review and may be revised once the INS issues regulations governing honorarium
payment issues.
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How does the nonresident
file their tax return?
A. Nonresidents living in St. Louis may seek tax return
assistance through the UMSL NRA VITA site each spring, according to information
that will be provided at the Tax Assistance page available here at the beginning of each cleandar year.
B. Nonresidents outside St. Louis will be provided assistance
via e-mail and fax whenever possible. Prior to leaving St. Louis, students
and researchers with income must provide a forwarding address to the NRA
Taxation Specialist to ensure timely delivery of Forms W-2 and 1042-S.
C. Persons who are outside the United States on April
15 have until June 15 to file their tax return.
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How can I learn more
about the NRA taxation process at UMSL?
Contact the NRA Taxation Specialist at scrawshaw@umsl.edu to schedule a presentation for department or division personnel that is
tailored to your NRA needs.
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