panel of presenters payroll – anita gurule opaa – lisa silbernagel fa&a – rae lee aguilar...

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

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

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

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?

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

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

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

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

Flow Chart

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

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

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

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.

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.

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.

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.

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

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.

Entities Flowchart

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

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

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

NRA Question and Answer

panel of presenters payroll – anita gurule opaa – lisa silbernagel fa&a – rae lee aguilar...

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