(Approved by the Executive Vice President by authority of Executive Order No. 5)
A prize or award paid in recognition of academic achievement is considered to be a fellowship. A fellowship is generally defined as an amount paid for the benefit of an individual to aid in the pursuit of study or research. Amounts paid as a fellowship to nonresident alien students with a F1 or J1 nonimmigrant visa classification are subject to withholding at a rate of 14% (instead of the 30% rate applicable to other compensation paid to nonresident aliens), unless the individual claims exemption from taxes under the provisions of a tax treaty.
The department determines that an individual is a nonresident alien for tax purposes, is eligible for this type of compensation (F1 or J1 nonimmigrant visa classification), and that the prize or award is being paid in recognition of academic achievement of a degree or non-degree seeking student.
The department submits a purchase requisition to initiate payment of a prize or award to a nonresident alien in recognition of academic achievement (Object Code 0802). Include a note in the "Comments" field of the purchase requisition stating that the prize or award is being paid to a nonresident alien in recognition of academic achievement.
The sponsoring department assists the individual
in completing the Nonresident Alien Payment Data Sheet form
to provide necessary information for the University to determine
tax withholding requirements.
Note: If a tax treaty exemption is claimed, an Ownership, Exemption or Reduced Rate Certificate, IRS form 1001, is required to be attached to the Nonresident Alien Payment Data Sheet form instead of an Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, which is required for other forms of compensation. The completed form, together with the required attachments, must be submitted to the Accounts Payable Office, Attn: NRA Desk, Box 351130, before payment will be released.
The department prepares an Invoice Voucher/Receiving Report form and submits it to the Accounts Payable Office, Attn: NRA Desk, Box 351130.