Payments issued to a Non-Us Citizen are subject to different IRS withholding and reporting rules than payments issued to US Citizens and Resident Aliens.
The ability of the Research Foundation to issue payment will depend upon a variety of factors specific to the individual situation. Factors to be reviewed include type of payment, source of funding, location of services, visa type, US residency status, Substantial Presence Test, tax treaties, and applicable tax rates.
Permanent Resident Alien: An individual who has been granted lawful US Permanent Resident status (often referred to as a green card). Such individuals are taxed in the same manner at US Citizens.
Resident Alien: US tax residency status of an individual who has been present in the US for a period of time long enough to meet the Substantial Presence Test. Resident Aliens are taxed on their worldwide income in the same manner as US citizens.
Non-Resident Alien: US tax residency status of a non-US citizen who is temporarily present in the US. Non-Resident Aliens are required to pay taxes only on their income from US Sources.
Substantial Presence: A test used to determine an individual’s US residency status for tax purposes. It involves the calculation of the total number of days that an individual has been present in the US over a period of three calendar years. For tax purposes, a person is considered to be present in the US for a calendar year if they are present during one or more days between January 1st and December 31st.
All payments made to, or on behalf of a Non-Resident Alien, with the exception of travel reimbursement tied to a business purpose, must be reported to the Internal Revenue Service (IRS).
Please note that the visa type of the individual, while an important factor to consider, does not alone indicate the ability to pay the individual. The type or classification of a visa is indicated on a stamp or sticker placed on the individual’s passport. Foreign visitors who arrive in the United States with a visa classification that does not allow for payment nor reimbursement cannot legally be paid directly, nor on behalf of (through use of a third party) by the Research Foundation.
US Income Tax treaties or agreements in effect with many countries serve to reduce double taxation. Tax form 8233 must be provided to claim a tax treaty currently in effect.
Payments and taxes withheld for Non-Resident Aliens are reported to the IRS on the annual tax form 1042S.
For additional information or clarification of any of the above, please contact your Grant Administrator.
In addition to typical documentation required for a particular payment request, payments to or on behalf of a non-resident alien must be accompanied by a completed Alien Information Form. Additional documentation may be required dependent upon the specifics of the situation.
Alien Information Form