U.S. tax and other laws and international treaties can complicate payments to foreign nationals. This guide is intended to simplify the process.
Following are examples of common payments the University makes to foreign nationals visiting or working in the U.S.
Check Before Inviting or Contracting
Occasionally, the University cannot legally pay the visitor or independent contractor. Here are some things to check prior to making a formal invitation or contracting for professional services.
Discuss with Payee Early
In order to avoid surprises and to ensure that the process goes smoothly, we recommend that you review the options (for example, whether the payee wants to/is eligible to request a withholding reduction, and if so is the payee eligible to request withholding based on his or her country of origin) and discuss them with your visitor WELL BEFORE ARRIVAL.
The IRS requires a flat 30% withholding on ALL types of payments to foreign national individuals UNLESS:
Your payee has options…
In order to reduce the occurrence of double-taxation for foreign nationals (taxed in U.S. and possibly taxed in their home country), the U.S. government has negotiated individual tax treaties with many countries. Click here to see a list of countries with tax treaty agreements with the US.
Under IRS regulations, if they wish, foreign nationals have the responsibility to apply for a reduction in U.S. tax withholding. The amount of tax withholding reduction (called a treaty benefit) depends on each country's negotiated tax treaty with the U.S. The University understands that the IRS's application process can be daunting for visitors and independent contractors who are not familiar with U.S. tax law, or for whom English is a second language.
The University provides free professional assistance in completing the application and has acquired special software to help its visitors and independent contractors understand the requirements under U.S. tax treaties.
This is what you will need (by payment type) to pay a foreign national who wishes to apply for a tax withholding reduction:
Please review the 9-5-6 rule for honoraria paid to visitors in B1, B2, VWB, or VWT status
Travel Grants and : Submit the following through Concur (see instructions on pages 84-87 of the Travel and Expense Management Guide):
*For wire or foreign currency check payments please see this page for instructions.