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*Formerly part of the University Handbook
Administrative Policy Statement
32.4



Guide for Payments to Nonresident Aliens

(Approved by the Executive Vice President by authority of Executive Order No. 5)



1.  General Overview

The purpose of this policy statement is to provide a reference tool and administrative procedural guide for University departments that make payments to nonresident aliens in order to assure that the University fulfills its tax withholding and reporting obligations in accordance with federal laws and regulations. This policy statement does not cover all situations. It covers only the most common type of payments made to nonresident aliens invited to the University that are processed through the Purchasing/Accounts Payable or Travel systems. It does not apply to payments made to aliens who are appointed as University employees or who are awarded financial aid through scholarships or fellowships. Assistance with payments to aliens may be obtained from the following sources:

  • Employees—Call the Payroll Office, 206–543–9186
  • Financial Aid—Call the Student Accounts Office, 206–543–4061
  • All Other Payments—Send inquiries via email to nratax@u.washington.edu

In no way should this guide be construed to be rendering legal or tax advice to nonresident aliens. Aliens who have specific tax questions or problems are advised to seek assistance from the Internal Revenue Service (IRS), a certified public accountant, or an attorney.

  a. Nonimmigrant Visa Classification and Compensation Eligibility

Generally, compensation for services performed as an independent contractor and travel or expense reimbursements may be made as shown in the following table, provided:

    #1 The nonresident alien is invited and formally sponsored by the University or has appropriate written authorization to visit the University from the organization that sponsored the nonresident alien's visit to the United States.

    #2 The nonresident alien obtains an Immigration and Naturalization Service's Arrival/Departure Record, INS form I–94 at the port of entry into the United States.

    The University is not legally authorized to pay compensation when the individual's nonimmigrant visa classification does not permit such payments or when the individual is not in possession of the appropriate documentation. Departments should contract the International Services Office, 206–543–0841, to determine nonimmigrant visa classification and other factors to consider before inviting an alien to visit the University. In addition, if the alien is to be paid compensation as an independent contractor during their visit and is from a country having a tax treaty with the United States, the alien should be furnished with an Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, to claim exemption from federal tax withholding as described in these procedures at the time the invitation to visit is extended. The alien should complete and return the form prior to their arrival in this country. Exemption from withholding on the basis of a tax treaty is only effective for payments made at least ten days after the University has accepted and mailed the Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, to the IRS.

   
Nonimmigrant Visa Class1
Description
Independent
Contractor2
Compensation
Travel/Expense Reimbursement
B–1 Visitor for Business No Yes
B–2 Visitor for Pleasure No No
F–1 Students No Yes
H–1 Temporary Worker No Yes
J–1 Exchange visitors including students, scholars, and trainees Yes Yes
TN A TN visa is issued in lieu of a H–1 visa or other work-authorized visa (Used by Canadian and Mexican residents under NAFTA) No Yes
WB Admitted without visa under Visa Waiver Program; treated as B–1 visitor for payment purposes No Yes
WT Admitted without visa under Visa Waiver Program; treated as a B–2 visitor for payment purposes No No

1 The nonimmigrant visa classifications shown above are the ones most commonly used for aliens invited to visit the University; for classifications not shown above, send inquiries via email to nratax@u.washington.edu.

2 See Section 1.c.1 for a definition of an independent contractor.


  b. Taxpayer Identification Number

While a taxpayer identification number (see Section 1.c.9 for a definition) is not required to receive payments as an independent contractor or to take advantage of tax treaty benefits to which the nonresident alien may be entitled, IRS regulations require a taxpayer identification number on any tax returns filed by a nonresident alien after January 1, 1997. Therefore, it is highly recommended that any invitation extended to a nonresident alien to visit the University include an Application for IRS Individual Taxpayer Identification Number, IRS form W–7, and related instructions for the individual's use in obtaining an Individual Taxpayer Identification Number (ITIN), unless it is known that the individual has already been issued an ITIN or is required to have a United States Social Security Number. The Application for IRS Individual Taxpayer Identification Number, IRS form W–7, and related instructions may be obtained from the International Services Office, 206–543–0841, for inclusion with letters of invitation, or is available at United States consulates.

  c. Definitions

    1) Independent Contractor—An independent contractor is an individual who performs personal services for the University, where the University has the right to specify the result to be accomplished but not the means and methods by which the result is to be accomplished. Independent contractors include guest lecturers, speakers, seminar participants or leaders who are paid a fee (commonly referred to as an honorarium) for performing the service. Independent contractors also include individuals serving in an advisory or consulting capacity in the performance of research with a faculty member or employee. For further information and required documentation to substantiate independent contractor status, see Administrative Policy Statement 32.3.

    2) Honorarium—An honorarium is generally a payment to an individual possessing recognized professional or scientific credentials which uniquely qualifies him or her to be a guest lecturer, speaker, seminar participant or leader, and the fee to be paid for the service is not established by a contractual agreement between the University and the individual. The fee is usually an amount determined by the sponsoring department and is paid on a voucher prepared by the sponsoring department rather than on an invoice submitted by the individual performing the service.

    3) Alien Status—Non-United States citizens are classified as either resident aliens or nonresident aliens.

      a) Resident Aliens—A resident alien for immigration purposes is an individual who is not a citizen of the United States, who has been admitted as an immigrant, and is authorized to live and work in the United States indefinitely-commonly referred to as a "green card" holder. A resident alien for tax purposes must pay tax to the United States government on his or her worldwide income, regardless of source. A resident alien for tax purposes can claim exemptions for dependents and must file an income tax return on IRS forms 1040, 1040A or 1040EZ.

      b) Nonresident Aliens—A nonresident alien for immigration purposes is an individual who is not a citizen of the United States and who has been admitted for a temporary stay that will end when the purpose of the visit has been accomplished. A nonresident alien for tax purposes is a non-United States citizen who, during his or her stay in the United States, either pays United States tax only on U.S. Source income or is exempt from paying United States taxes because of an income tax treaty between the United States and the government of his or her country of residence for tax purposes. Generally, a nonresident alien for tax purposes receives no tax exemption for dependents and must file an income tax return on an Income Tax Return for Nonresident Aliens, IRS form 1040NR.

    4) Source of Income—Payment made to a nonresident alien independent contractor is "sourced" according to where the service is performed; the place to which the payment is made, the organization providing the funding, or the currency in which the payment is made are not factors in determining "source." Payment made to a nonresident alien independent contractor is "U.S. Source" income subject to federal taxes if the services are performed in the United States; if services are performed outside of the United States, the income is "International Source" income and exempt from United States taxation.

    5) Taxable Income—Any compensation paid to a nonresident alien, or paid to a third party on their behalf, on which taxes are required to be paid to the United States government is taxable income to the recipient. Employee wages, stipends, independent contractor earnings, honorariums, prizes and awards, and lump sum payments to defray the costs of travel which are not accounted for under an accountable travel plan are all considered taxable income and federal taxes must be withheld by the University from such payments at the appropriate withholding rate. Reimbursement for travel expenses (including living allowances) that are submitted for reimbursement through an accountable plan that reimburses the individual or makes payment to a third party on the individual's behalf for actual expenses incurred will not be considered taxable income.

    6) Withholding—Withholding means that amounts necessary to cover United States taxes will be taken out of the payroll, stipend, independent contractor, or other payments made by the University and remitted to the IRS as required by federal laws. For payments to nonresident alien independent contractors, the rate of withholding is 30% unless federal tax is specifically exempted by a tax treaty between the United States government and the government of the nonresident alien's country of residence. Invoking the provisions of a tax treaty is not automatic. The University is required to file an International Person's U.S. Source Income Subject to Withholding, IRS form 1042–S, with the IRS by March 15 of each year to report the amount of all payments made to the nonresident alien during the previous calendar year, whether or not there was withholding on the payments.

Note: As stated above, if the nonresident alien is not from a tax treaty country, or does not wish to invoke the provisions of the tax treaty, tax will be withheld from the gross amount to be paid at the rate of 30%. However, if the department desires the net payment to the nonresident alien to be a specific amount after withholding is applied, the net amount must be increased to cover the taxes to be withheld. The gross charge to the budget may be determined by the following formula:
Amount of net payment
1 – tax rate
Example: The department desires to pay a visitor an honorarium of $500 after taxes have been withheld. Applying the formula ($500/[1 – .3] = $714.29), the department budget would be charged a total of $714.29.

    7) Tax Treaty—An agreement negotiated between the United States government and the government of another country that may qualify a nonresident alien for exemption from income tax withholding. It is important to note that the existence of a tax treaty between the United States and the nonresident alien's country of residence does not always mean that the type of payment being made by the University to the nonresident alien is exempt from tax. Benefits of tax treaties vary widely and some countries place specific dollar and time limitations on the earnings that may be exempted from tax under their treaty. IRS Publication 901 summarizes the benefits available to nonresident aliens by virtue of tax treaties. A copy of IRS Publication 901 may be obtained from the IRS.

Note: Tax treaties updated or newly ratified during the course of any calendar year are not effective until January 1 of the next calendar year, and are not incorporated into IRS Publication 901 until scheduled periodic updates. Questions regarding potential treaties with a country not listed in IRS Publication 901, may be sent via email to nratax@u.washington.edu.

    8) Living Allowances—Allowances paid in lieu of per diem reimbursements to visitors who are not being paid compensation for the performance of personal services. Typically, these visitors are scientists, scholars, or students who are invited to the University for training or information exchanges. Living allowances are generally paid only when the individual will be visiting the University for at least 30 days and desires to obtain lodging and/or meals from noncommercial facilities (e.g., rent an apartment and prepare their own meals).

Payments are made in 30-day increments starting at the beginning of the visit to cover monthly rent plus a reasonable amount for meals. If required by a rental agreement, the first monthly payment may include the rent amount for the first and last month, plus a damage deposit. The total of living allowances paid may not exceed the maximum per diem entitlement (lodging plus meals) had the individual stayed in and obtained meals from commercial facilities for the same period of time.

Generally, the individual is responsible for making his or her own arrangements for lodging and meals, and living allowances will be paid directly to the individual. Under exceptional circumstances, the University may contract with a third party for lodging to be provided to the nonresident alien; however, the total cost of leased lodging facilities may not exceed the lodging portion of the per diem entitlement had the individual stayed in commercial facilities. Leases for lodging on behalf of a nonresident alien who will be visiting for periods of 30 to 90 days will be negotiated by the Purchasing Department. Leases in excess of 90 days must be negotiated by the University's Real Estate Office. Payment of living allowances or contracting for lodging on behalf of the individual will not preclude the reimbursement of miscellaneous travel expenses (e.g., airfare, rental cars, taxis, etc.) normally authorized for reimbursement under University travel procedures.

    9) Taxpayer Identification Number—A number issued by an agency of the United States government that identifies the taxpayer to the IRS on any forms required to be filed in relation to federal income tax administration. The Taxpayer Identification Number (TIN) may be a United States Social Security Number (SSN) issued to individuals by the Social Security Administration, a Federal Employer Identification Number (FEIN) issued to a United States business entity by the IRS, or an Individual Tax Identification Number (ITIN) issued by the IRS to an individual who is a nonresident alien and who does not qualify for an SSN. An SSN is required for any individual (United States citizen, resident alien, or nonresident alien) who will be paid as an employee by a United States business entity.

  d. Forms

    1) Purchase Requisition—This online document is entered into the Purchasing/Accounts Payable System (PAS) to initiate or confirm a purchasing or travel action.

    2) Employee Versus Independent Contractor Classification Checklist—Employee Versus Independent Contractor Classification Checklist form is used to determine whether an individual performing services for the University should be classified as an employee or as an independent contractor. See Administrative Policy Statement 32.3 for related information.

    3) Nonresident Alien Payment Data Sheet—The Nonresident Alien Payment Data Sheet form is used to provide necessary information to determine federal tax withholding status and to be able to report payments made to a visiting nonresident alien as required by the IRS.

    4) Arrival/Departure Record—The Arrival/Departure Record, INS form I-94, is issued by the Immigration and Naturalization Service to nonimmigrant aliens upon arrival in the United States. An individual in possession of the departure portion of this may only be compensated if the document is annotated with an appropriate nonimmigrant visa classification. The expiration date is noted on the form. Note: A copy of this form must be attached to the University's Nonresident Alien Payment Data Sheet form.

    5) Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual—The Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, is required to be filed with the IRS to substantiate exemption from federal tax withholding on U.S. Source compensation paid to a nonresident alien performing services as an independent contractor. The form and instructions for its completion may be obtained from the International Services Office, 206–543–0841, or by making an email request to nratax@u.washington.edu. Departments are encouraged to furnish the visitor with this IRS form for completion prior to the visitor's arrival at the University. The visitor should be directed to return the completed form to the sponsoring department for forwarding (original and two copies required) to the Accounts Payable Office, Attn: NRA Desk, Box 351130. This form is required to be certified by the Accounts Payable Office and filed with the IRS on behalf of the visitor a minimum of ten days prior to making a payment that is to be exempt from tax withholding.

    6) Ownership, Exemption or Reduced Rate Certificate—The Ownership, Exemption or Reduced Rate Certificate, IRS form 1001, is required to be filed to substantiate exemption from federal tax withholding on payments other than on compensation paid to an independent contractor, including fellowships and scholarships. The form and instructions for its completion may be obtained by sending an email request to nratax@u.washington.edu.

    7) Invoice Voucher/Receiving Report—The University's Invoice Voucher/Receiving Report form is used as an invoice to substantiate payments by a vendor who has no invoice form of his or her own, or when a vendor or claimant invoice would not be expected. The form is available from University Stores.

    8) Travel Expense Voucher—The Travel Expense Voucher (TEV) form is used to substantiate reimbursement of travel expenses. The form is available from University Stores.

2.  Procedures for Processing Requests for Payments to Nonresident Aliens Performing Services as an Independent Contractor

  a. Performance of Personal Services Only (Including Honorarium)

    1) Nonresident Alien Eligibility—The department determines that an individual is a nonresident alien for tax purposes and is eligible for this type of compensation by comparing the individual's nonimmigrant visa classification with the table in Section 1.a.

    2) Independent Contractor Status—The department establishes that services are being provided by an independent contractor by completion of an Employee Versus Independent Contractor Classification Checklist form.

Note: A person responsible for teaching a regular University course must be appointed as an employee and may not be classified as an independent contractor.

    3) Aliens From a Country With a Tax Treaty—The department determines whether the alien is from a country having a tax treaty with the United States, and if so, obtains an Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233. The form should be completed by the alien (preferably prior to arriving at the University) and returned to the Accounts Payable Office, Attn: NRA Desk, Box 351130, by the sponsoring department.

Note: If the nonresident alien is claiming exemption from taxes under the provision of a tax treaty, the Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, is not effective (by law) until ten days after submission of the form to the IRS. Therefore, the first payment that may be exempted from withholding must be made a minimum of 15 days after the date the form is received by the Accounts Payable Office. If the form is not submitted to the Accounts Payable Office, or cannot be filed within the required time frame with the IRS, withholding from the payment will be imposed at the 30% withholding rate.

    4) Acquiring Personal Services—The department submits a purchase requisition to initiate or confirm acquisition of personal services (Object Code 02–90), together with associated travel costs (Object Code 03–20), from a nonresident alien independent contractor. Include a note in the "Comments" field of the purchase requisition stating that the services are being obtained from a nonresident alien.

Note: The original Employee Versus Independent Contractor Classification Checklist form must be submitted as an attachment to the purchase requisition.

    5) Determining Tax Withholding Requirements—Upon the nonresident alien's arrival at the University, 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. 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.

    6) Submitting an Invoice—The department obtains and submits an invoice citing the appropriate purchase requisition number for services performed to the Accounts Payable Office, Attn: NRA Desk, Box 351130. If payment is for an honorarium, or if the visitor does not have his or her own invoice form, the department prepares an Invoice Voucher/Receiving Report form and submits it to the Accounts Payable Office, Attn: NRA Desk, Box 351130.

  b.  Performance of Personal Services (Including Honorarium) and Reimbursement of Associated Travel Expenses

    1) Nonresident Alien Eligibility—The department determines that an individual is a nonresident alien for tax purposes and is eligible for this type of compensation by comparing the individual's nonimmigrant visa classification with the table in Section 1.a.

    2) Independent Contractor Status—The department establishes that services are being provided by an independent contractor by completion of an Employee Versus Independent Contractor Classification Checklist form in accordance with Administrative Policy Statement 32.3.

Note:
A person responsible for teaching a regular University course must be appointed as an employee and may not be classified as an independent contractor.

    3) Aliens From a Country With a Tax Treaty—The department determines whether the alien is from a country having a tax treaty with the United States, and if so, obtains an Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233. The form should be completed by the nonresident alien (preferably prior to arriving at the University) and returned to the Accounts Payable Office, Attn: NRA Desk, Box 351130, by the sponsoring department.

Note: If the nonresident alien is claiming exemption from taxes under the provision of a tax treaty, the Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, is not effective (by law) until ten days after submission of the form to the IRS. Therefore, the first payment that may be exempted from withholding must be made a minimum of 15 days after the date the form is received by the Accounts Payable Office. If the form is not submitted to the Accounts Payable Office, or cannot be filed within the required time frame with the IRS, withholding from the payment will be imposed at the 30% withholding rate.

    4) Acquiring Personal Services—The department submits a purchase requisition to initiate or confirm acquisition of personal services (Object Code 02–90), together with associated travel costs (Object Code 03–20), from a nonresident alien independent contractor. Include a note in the "Comments" field of the purchase requisition stating that the services are being obtained from a nonresident alien.

Note: The original Employee Versus Independent Contractor Classification Checklist form must be submitted as an attachment to the purchase requisition.

    5) Determining Tax Withholding Requirements—Upon the nonresident alien's arrival at the University, 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. 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.

    6) Submitting an Invoice—The department obtains and submits an invoice citing the appropriate purchase requisition number for services performed, or for associated travel expenses, to the Accounts Payable Office, Attn: NRA Desk, Box 351130. If payment is for an honorarium, or if the visitor does not have his or her own invoice form, the department prepares an Invoice Voucher/Receiving Report form and submits it to the Accounts Payable Office, Attn: NRA Desk, Box 351130.

3.  Procedures for Processing Requests for Payments to Nonresident Aliens Who are Visiting for the Purpose of Training or Information Exchange and Perform No Personal Services

  a. Reimbursement of Travel Expenses

    1) Nonresident Alien Eligibility—The department determines that an individual is a nonresident alien for tax purposes, is eligible for this type of compensation by comparing the individual's nonimmigrant visa classification with the table in Section 1.a, and is not performing personal services which should be compensated under the independent contractor Section 2.

    2) Authorizing Reimbursement of Travel Expenses—The department submits a purchase requisition to initiate authorization to reimburse travel expenses to a visiting nonresident alien (Object Code 04–51). Include a note in the "Comments" field of the purchase requisition stating that the reimbursement is being made to a nonresident alien who will not be paid compensation for the performance of personal services. Reimbursement of travel expenses is under an accountable plan and will not be considered income to the recipient.

    3) Reimbursing Travel Expenses—The department prepares a TEV upon completion of the travel for which the nonresident alien is being reimbursed and submits it to the Travel Office, Box 351117. Reimbursement will be made for actual expenses incurred.

    4) Releasing the Payment—Upon the nonresident alien's arrival at the University, the sponsoring department assists the individual in completing the Nonresident Alien Payment Data Sheet form. The completed form, together with the required attachments, must be submitted to the Travel Office with the TEV, or to the Accounts Payable Office, Attn: NRA Desk, Box 351130, before payment will be released.

  b. Living Allowances for the Individual

    1) Nonresident Alien Eligibility—The department determines that an individual is a nonresident alien for tax purposes, is eligible for this type of compensation by comparing the individual's nonimmigrant visa classification with the table in Section 1.a, and is not performing personal services which should be compensated under the independent contractor provisions in Section 2.

    2) Initiating Payment of Living Allowances—The department submits a purchase requisition to initiate payment of living allowances to a nonresident alien visitor. The item description should indicate payment of living allowances for a specific time period (Object Code 02–90). Include a note in the "Comments" field of the purchase requisition stating that the living allowances are being paid to a nonresident alien who will not be paid compensation for the performance of personal services. If the individual is also to be reimbursed for travel expenses, additional items should be entered (Object Code 04–51) as necessary to cover the various expenses to be reimbursed (e.g., airfare, taxis, rental car, etc.).

    3) Submitting the Invoices—The department prepares an Invoice Voucher/Receiving Report form at the beginning of the performance period to cover living allowances for the first 30 days, and submits the completed form to the Travel Office, Box 351117. If required by the rental agreement, the first monthly payment may include the rent amount for the first and last month, plus a damage deposit. Another Invoice Voucher/Receiving Report form to pay living allowances must be submitted to the Travel Office at the beginning of each subsequent 30-day period. The total allowance paid may not exceed the maximum per diem entitlement (lodging plus meals) had the individual stayed in and obtained meals from commercial facilities for the same period of time.

      a) With a Substantiating Document—A statement or invoice from the landlord or lessor delineating the amount of rent due (including damage deposit, if applicable) is required to be submitted as a substantiating document to the Invoice Voucher/Receiving Report form. When supported by a statement or invoice from the landlord or lessor, payment of living allowances will be considered pursuant to an accountable plan and will not be considered income to the recipient.

      b) Without a Substantiating Document—If a statement or invoice is not submitted as a substantiating document, the amount of living allowance will not qualify for exemption under an accountable plan for travel or living expenses and will be subject to tax withholding at the 30% rate.

Note: If the nonresident alien is claiming exemption from taxes under provision of a tax treaty, the Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual, IRS form 8233, is not effective (by law) until ten days after submission of the form to the IRS. Therefore, the first payment that may be exempted from withholding must be made a minimum of 15 days after the date this IRS form is received by the Travel Office. If this form is not submitted to the Travel Office, or cannot be filed within the required time frame with the IRS, withholding from the payment will be imposed at the 30% withholding rate.

    4) Reimbursing Travel Expenses Other Than Living Allowances—The department prepares a TEV upon completion of the travel for which the nonresident alien is being reimbursed and submits it to the Travel Office, Box 351117. Reimbursement will be made for actual expenses incurred, excluding any amounts claimed for lodging or meals while in the Seattle area. Reimbursement of travel expenses is under an accountable plan and will not be considered income to the recipient.

Note: It is the responsibility of the department to ensure that the individual is not claiming reimbursement for personal expenses, or lodging or meal expenses on the TEV.

    5) Releasing the Initial Payment—Upon the nonresident alien's arrival at the University, the sponsoring department assists the individual in completing the Nonresident Alien Payment Data Sheet form. The completed form, together with the required attachments, must be submitted to the Travel Office, Box 351117, with the Invoice Voucher/Receiving Report form, before initial payment of living allowances will be released.

  c. Contracting for Lodging on Behalf of the Individual

    1) Nonresident Alien Eligibility—The department determines that an individual is a nonresident alien for tax purposes, will be visiting for a period of 30 days or more, is eligible for this type of compensation by comparing the individual's nonimmigrant visa classification with the table in Section 1.a, and is not performing personal services which should be compensated under the independent contractor provisions in Section 2.

    2) Visits of 30–90 Days

      a) Initiating a Lease for Lodging—The department submits a purchase requisition to initiate a lease of lodging on behalf of the nonresident alien (Object Code 03–80) as soon as an invitation to visit has been accepted by the nonresident alien. Include a note in the "Comments" field of the purchase requisition stating that the lodging facilities are being leased on behalf of a nonresident alien (identified by name) who will not be paid compensation for the performance of personal services. If the individual is also to be reimbursed for other travel expenses, the department must submit a separate purchase requisition as outlined in Section 3.a.

      b) Releasing the Initial Payment—Upon the nonresident alien's arrival at the University, the sponsoring department assists the individual in completing the Nonresident Alien Payment Data Sheet form. The completed form, together with the required attachments, must be submitted to the Accounts Payable Office, Attn: NRA Desk, Box 351130, before the initial rent payment will be released to a third party.

      c) Payment of Rent and Deposits—The landlord or lessor submits an invoice, citing the appropriately numbered Purchase Order form for rent and deposits included in the lodging lease agreement to the Accounts Payable Office, Attn: NRA Desk, Box 351130. Payment of rent to a third party on behalf of the nonresident alien will be considered reimbursement of travel expenses pursuant to an accountable plan and will not be considered as income to the nonresident alien.

      d) Reimbursing Travel Expenses Other Than Amounts Paid to a Third Party—The department prepares a TEV upon completion of the travel for which the nonresident alien is being reimbursed and submits it to the Travel Office, Box 351117. Reimbursement will be made for actual expenses incurred, excluding any amounts claimed for lodging while in the Seattle area. Reimbursement of travel expenses is under an accountable plan and will not be considered income to the recipient.

Note: It is the responsibility of the department to ensure that the individual is not claiming reimbursement for personal expenses or lodging expenses on the TEV.

    3) Visits in Excess of 90 Days

      a) Initiating a Lease for Lodging Through the Real Estate Office—The department submits a written request (approved by the appropriate dean or vice president), for leasing lodging on behalf of the nonresident alien to the University's Real Estate Office as soon as an invitation to visit has been accepted by the nonresident alien. The request should specify the specific property desired (if known), the period the lease is to cover, necessary information to identify the individual for whom the lease is requested, and a statement that the nonresident alien will not be paid compensation for the performance of personal services.

      b) Reimbursing Travel Expenses—If the individual is also to be reimbursed for other travel expenses, the department must submit a purchase requisition as outlined in Section 3.a.

      c) Releasing the Initial Payment—Upon the nonresident alien's arrival at the University, the sponsoring department assists the individual in completing the Nonresident Alien Payment Data Sheet form. The completed form, together with the required attachments, must be submitted to the Accounts Payable Office, Attn: NRA Desk, Box 351130, before the initial rent payment will be released to a third party.

      d) Payment of Rent and Deposits—The Real Estate Office submits a Check Request form for rent (and damage deposit, if applicable) included in the lodging lease agreement to the Accounting Operations Office, Box 351120. Payment of rent to a third party on behalf of a nonresident alien will be considered reimbursement of travel expenses pursuant to an accountable plan and will not be considered as income to the nonresident alien.

      e) Reimbursing Travel Expenses Other Than Amounts Paid to a Third Party—The department prepares a TEV upon completion of the travel for which the nonresident alien is being reimbursed and submits it to the Travel Office, Box 351117. Reimbursement will be made for actual expenses incurred, excluding any amounts claimed for lodging while in the Seattle area. Reimbursement of travel expenses is under an accountable plan and will not be considered income to the recipient.

Note:
It is the responsibility of the department to ensure that the individual is not claiming reimbursement for personal expenses or lodging expenses on the TEV.

4.  Procedures for Payment of Prizes and Awards in Recognition of a Nonresident Alien Student's Academic Achievement

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 F–1 or J–1 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.

a.   Nonresident Alien Eligibility

The department determines that an individual is a nonresident alien for tax purposes, is eligible for this type of compensation (F–1 or J–1 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.

b.   Initiating Payment of a Prize or Award

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 08–02). 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.

c.   Determining Tax Withholding Requirements

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.

d.   Submitting an Invoice

The department prepares an Invoice Voucher/Receiving Report form and submits it to the Accounts Payable Office, Attn: NRA Desk, Box 351130.

February 1997.