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Nonresident Alien

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Description:

An alien is any person who is not a United States citizen. The Internal Revenue Service (IRS) classifies aliens as either nonresidents or residents.

A nonresident alien is an alien who does not meet either the IRS's green card test (i.e. a lawful permanent resident) or substantial presence test. These test are discussed further in IRS Publication 519.

Generally, students (F-1 or J-1 visa status) will not meet the substantial presence test until they have been in the USA for 5 calendar years and visiting teachers/researchers (J-1 visa status) will not meet the substantial presence test until they have been in the USA for 2 calendar years.

Resident aliens are taxed the same as an U.S. citizen, while significant differences in the withholding, reporting and tax laws apply to nonresident aliens.

Form Requirements:

If the Individual is been paid stipend only:

1. Fill out UW Form 1388, Determination of Residency for Tax Purposes . Instructions and the form can be found at: http://www.washington.edu/admin/payroll/form1388.html

2. Fill out Form W-8BEN if the individual qualifies to claim a tax treaty. Please include the required supporting documentation. Instructions can be found at: http://www.washington.edu/admin/payroll/w-8ben.html

To see what countries have a tax treaty that covers stipend payments please go to: http://www.washington.edu/admin/payroll/nrascholarships.html

In general, scholarship or fellowship pay to a non-resident alien is subject to federal income tax withholding (14%). However, a non-resident alien who qualifies to claim a tax treaty can avoid withholding by properly filling form W-8BEN. Properly filling the form implies that all required information is included and accurate, that the addendum and additional documentation is also submitted, and that there are no scratches or corrections of any kind in the documents including liquid paper (IRS regulations). Supporting Required Documentation: Please attach a copy of the Form I-20 for F-1 Visa Holders or a copy of the DS2019 for J-1 Visa holders. In addition, please submit a copy of your Social Security Card. Please do not submit this form until you get a Social Security number since the Payroll Office will NOT be able to grant the benefits of the tax treaty until we have your Social Security number. The University of Washington will NOT refund federal withholding taxes due to either late or an incomplete W-8BEN. The individual can request a refund from the IRS when he or she files his or her return income tax

If the individual is paid both stipend and wages:

1. Submit Form 1388. Instructions and the form can be found at: http://www.washington.edu/admin/payroll/form1388.html

2. Submit Form W-8BEN if the individual qualifies to claim tax treaty for his stipend payments. Please include all the required supporting documentation. The Form W-8BEN and instructions can be found at: http://www.washington.edu/admin/payroll/w-8ben.html

To see what countries have a tax treaty that covers stipend payments please go to: http://www.washington.edu/admin/payroll/nrascholarships.html

In general, scholarship or fellowship pay to a non-resident alien is subject to federal income tax withholding (14%). However, a non-resident aliend who qualifies to claim a tax treaty can avoid withholding by properly filling form W-8BEN. Properly filling the form implies that all required information is included and accurate, that the addendum and additional documentation is also submitted, and that there are no scratches or corrections of any kind in the documents including liquid paper (IRS regulations). Supporting Required Documentation: Please attach a copy of the Form I-20 for F-1 Visa Holders or a copy of the DS2019 for J-1 Visa holders. In addition, please submit a copy of your Social Security Card. Please do not submit this form until you get a Social Security number since the Payroll Office will NOT be able to grant the benefits of the tax treaty until we have your Social Security number. The University of Washington will not refund federal withholding taxes due to either late or an incomplete W-8BEN. The individual can request a refund from the IRS when he or she files his or her return income tax.

3. Submit Form I-9. Instructions for Completing Form I-9 can be found at: http://www.washington.edu/admin/payroll/nra.html

4. Submit Form W-4. Please follow the IRS special rules for non resident aliens. The form and its instructions can be found at: http://www.washington.edu/admin/payroll/specialrules.html

5. Submit Form 8233 to claim tax treaty benefits for wages/salary compensation. Form 8233 and instructions can be found at: http://www.washington.edu/admin/payroll/8233.htlm

If the individual is paid wages only:

1. Submit Form I-9. Instructions for Completing Form I-9 can be found at: http://www.washington.edu/admin/payroll/nra.html

2. Submit Form 1388. The form and its instructions can be found at: http://www.washington.edu/admin/payroll/form1388.html

3. Submit Form W-4. Please follow the IRS special rules for non resident aliens. The form and instructions can be found at:http://www.washington.edu/admin/payroll/specialrules.html

4. Submit Form 8233 to claim tax treaty benefits for wages/salary compensation. Form 8233 and its instructions can be found at: http://www.washington.edu/admin/payroll/8233.html

Contact Information:

For questions about wages/salaries (forms I-9, 1388, W-4 and 8233) please contact Yee Lam at 543-3595 or e-mail at ywlam@u.washington.edu.

For questions about stipend (form W-8BEN and the supporting documentation) please contact Eva Lu at 543-9186 or e-mail at eval@u.washington.edu

IRS Tax Filing:

For personal income tax questions, consult the IRS or a tax advisor. UW employees cannot give tax advice. Additional tax assistance for F-1 Students and J-1 Exchange Visitors can be found at International Services Office or at the Internal Revenue Service IRS

Nonresident Aliens will receive various forms depending on their visa type. You can see the types of forms you are expected to receive from this list.

For those needing a replacement 1042-S, the 1042-S Replacement Request Form can be downloaded from this link.

Employee Procedures:

When hired:

Get a social security number (if you don't already have one).
- Go to a local Social Security Administration Office to apply.
- Take original documents that show your identity and work authorization.
- See Social Security Administration website for more information.
- See SSA's Office of International Operations web site at www.ssa.gov/foreign/ for information on the Social Security program outside of the U.S.
Complete INS Form I-9 provided by your department.
- Enter all applicable information in Section I.
- Provide original documents such as passport with I-94 attached, I-20 and DS-2019. These documents verify both your identity and your work authorization.
Complete UW Form 1388, Determination of Residency for Tax Purposes.
- Must be completed by all alien employees upon initial hire at the UW and whenever there is a change in status.
- Insures proper amount and type of taxes are withheld.
Complete IRS Form W-4, Employees Withholding Allowance Certificate.
- Nonresidents must follow special IRS rules for filling out the W-4, as applicable.
If you wish to claim an income tax treaty exemption from withholding on your wages, complete IRS Form 8233.
- List of student treaties.
- List of teacher/researcher treaties.
If you wish to claim an income tax treaty exemption from withholding on your scholarship (non-wage) payments, complete IRS Form W8-BEN.
- Generally, the UW is required to withhold 14% of your stipend payment for Federal income taxes.
- Please see the list of countries that exempt Fellowships or Scholarships.

During your employment, you may receive additional forms from the UW that should be used when you complete your personal income tax return. These forms include:

Form 1042-S is issued on or before March 15th for the preceding tax year and reports payments to nonresidents such as:
- wages exempt from withholding under a tax treaty,
- scholarships and
- honorariums.
Form W-2

For personal income tax questions, consult the IRS or a tax advisor. UW employees cannot give tax advice.

Upon separation from the UW, please provide your home department with a forwarding address.

Payroll Coordinator Procedures:

Before offering an employment invitation, see the International Services Office web site at depts.washington.edu/uwiso or contact the International Services Office at (206-543-0840) early in the process. The UW can only pay individuals that come to the U.S. on work authorized visas.

When hiring an alien:

Complete INS Form I-9, Employment Eligibility Verification Form.
- Look at documents that establish both identity and work eligibility.
- List the document names and numbers in Section 2. Do not indicate "see attached".
- Be familiar with the special instructions for completing Section 2 for F-1 or J-1 visa holder.
- Remember to update Section 3 if the employee's work authorization period has been extended.
Verify the employee's social security number. If your employee does not have a social security number, he or she will need to go to a Social Security Administration office and apply for a number.
Ensure that your employee has completed UW Form 1388.
Ensure your employee has completed IRS Form W-4
- Be familiar with the special IRS rules for nonresidents completing the W-4 Form.
Ensure that IRS Form 8233 has been completed if employee claims tax treaty exemption on wages.
- List of student treaties.
- List of teacher/researcher treaties.
Ensure that IRS Form W8-Ben has been completed if tax treaty exemption on scholarships is claimed.

Extending Work Authorization:

Remember to update Section 3 if the employee's work authorization period has been extended.

To maintain continuous employment eligibility, an employee with temporary work authorization should apply for new work authorization at least 90 days before the current expiration date. If authorization is not granted within 90 days, then the employee may be authorized to continue employment for a period not to exceed 240 days beyond the expiration of their current stay while the application for extension of stay is pending. This extension applies only to certain nonimmigrants authorized for a specific employer incident to status, e.g. E, H, L, O, and TN status.

Neither the regulations nor Form I-9 indicate how aliens are to document the I-9 during the pending period, or how an employer must verify that an application for temporary stay has been timely filed. ICE states that Form I-797, receipt notice, (which includes the date an application or petition was received) can be relied upon as evidence of filing. To document an extension of employment authorization has been requested, note in Section 1 and 2 of Form I-9 to clearly reflect an extension has been filed. The update should be initialed and dated. Example, "H-1B Visa pending. Employment authorized by Sec 105 AC-21." Attach approval Notice I-797.

Prior to an employees work authorization expiring, the department and employee will receive advance notice from the Payroll Office. For employment to continue, the department will need to update the employee's I-9 Form (section 3) and forward the completed form to the Payroll Office. Notifications will be generated:

90 days prior to an employee's work authorization expiring the Payroll Coordinator for the employee's home department will receive a notice.
60 days prior to an employee's work authorization expiring, the Payroll Coordinator and the employee will receive a notice.
30 days prior to an employee's work authorization expiring the Payroll Coordinator, employee, Administrator and Human Resources will receive a notice the employee's work authorization is about to expire.

Three days after an employee's work authorization has expired, a notice will be forwarded to Human Resources and the department to suspend the employee's employment. Without current work authorization, the employee can not continue to work.

Social Security and Medicare Taxes:

Generally, wages are subject to social security and Medicare taxes.
There are a number of exceptions to this rule, two of which commonly affect nonresidents at the University:
- Alien students and scholars temporarily present in the U.S. in F-1 or J-1 non-immigrant status are exempt from social security and medicare taxes as long as their employment is authorized under immigration law and they are a "nonresident alien". See comprehensive discussion of this exemption written by Lowell Hancock of the IRS.
- Students who are enrolled and regularly attending classes and working at the UW in a student job classification are also exempt from social security and medicare taxes.
J-2 visa holders are subject to social security taxes.