Non-Resident Alien Taxation

1. Non-Resident Alien Taxation Presented by: Doris Settle Diane CarverWesternKentucky University February 3, 2012

2. Session Rules of Etiquette • Please turn off your cell phone/pager • If you must leave the session early, please do so as discreetly as possible • Please avoid side conversation during the session Thank you for your cooperation!

3. Introduction • The purpose of this session is to show how Western Kentucky University implemented Non-Resident Alien taxation for our Accounts Payable vendors and our students in Banner • The benefits of this session: • Banner can be used without modifying the forms • Banner can store information from Windstar • Both vendor and students can be taxed • Someone else has already created the scripts you will need

4. Introduction • How long has Western Kentucky University been on Banner? • Financial Aid – March 1999 • Admissions/Student/AR – October 2000 • Finance – July 2001 • Human Resources – January 2002

5. Introduction • WKU has approximately 2,100 full-time employees and 21,000 students • We are currently on the following versions of Banner • Financial Aid – Version 8.13 • Accounts Receivables – Version 8.3 • Student – Version 8.5 • Finance – Version 8.6 • Human Resources – Version 8.6 • General – Version 8.4

6. Topics of Discussion • Implementing NRA taxation in Accounts Payable • Implementing NRA taxation in Students • Auditing NRA Amounts and Paying IRS • Creating Files for Windstar

7. Implementing NRA taxation in Accounts Payable

8. Implementing NRA taxation in Accounts Payable • Set up tax liability accounts for federal and state withholding on FTMACCT

9. FTMACCT

10. Implementing NRA taxation in Accounts Payable • Set up rule codes on FTMRUCL for tax withholding on • DDWI Federal Withholding • CDWI Cancel Federal Withholding • DTWI State Withholding • CTWI Cancel State Withholding

11. FTMRUCL DDWI

12. FTMRUCL Posting Modifier

15. FTMRUCL CDWI

16. FTMRUCL Posting Modifier CDWI

19. Implementing NRA taxation in Accounts Payable • Update the posting modifier for account on the G010 process code on each of the rule codes with the liability account previously set up on FTMRUCL • Normally the modifier fund is not needed unless liabilities are posted to a separate fund. In which case, the fund should be equal to the liability fund. • We use a separate fund for our liability account with our NRA • Update the posting modifier for account on the G020 process code if a separate fund is used for liabilities, otherwise, no posting modifier is needed for G020

20. Implementing NRA taxation in Accounts Payable • Create or Update Vendor • A contractor status form must be filled out by department • Tax Compliance Office must approve form • Tax Compliance will fill in Windstar ID, Income Code and Withholding % • Send form to Accounts Payable

21. Implementing NRA taxation in Accounts Payable • Create or Update the Vendor record on FTMVEND

22. Implementing NRA taxation in Accounts Payable

23. Implementing NRA taxation in Accounts Payable • Create or Update the Vendor record on FTMVEND • Enter the Tax ID number (Windstar Tax ID), • Enter the Income Type • RY = 12 Income Code (00-Exemption Code) • RX = 12 Income Code (04-Exemption Code) • RE = 15 Income Code (00-Exemption Code & L-Income Code Subtype) • RZ = 15 Income Code (04-Exemption Code & L-Income Code Subtype) • NC = 16 Income Code (00-Exemption Code) • NX = 16 Income Code (04-Exemption Code) • FB = 20 Income Code (00-Exemption Code) • FX = 20 Income Code (04-Exemption Code) • PR = 50 Income Code (00-Exemption Code) • PX = 50 Income Code (04-Exemption Code)

24. Implementing NRA taxation in Accounts Payable • Create or Update the Vendor record on FTMVEND • Enter a percentage to withhold for either or both federal and state • 00 - Must be entered for NRA Vendors even if 0 • 14 - for 14% • 30 - for 30%

25. Implementing NRA taxation in Accounts Payable

26. Implementing NRA taxation in Accounts Payable • Requester enters a Payment Authorization Form On-line • This is a smart form • Once a requester enters id the name & address will fill in • Commodity Codes have a drop down list • The Vendor is checked for his citizenship status • If status is NRA an approval line is added for Tax Office • A Tax Compliant section is added to end of form

27. Implementing NRA taxation in Accounts Payable

28. Implementing NRA taxation in Accounts Payable

29. Implementing NRA taxation in Accounts Payable • Tax Compliance Office Receives Form • If Form is correct will sign on Approval line • Fills in Windstar Tax ID, Income Type and Withholding % • Sends Form to Accounts Payable

30. Implementing NRA taxation in Accounts Payable • Accounts Payable enters invoice on FAAINVE • If Payment Authorization is for an NRA vendor • Check FTMVEND set up • Invoice will have 1099 indicator and income code set • Change income code if different • Complete invoice like normal • Tax amount will not show on the form

31. Implementing NRA taxation in Accounts Payable

32. Implementing NRA taxation in Accounts Payable

34. Implementing NRA taxation in Accounts Payable • Start Check Process • Run FARINVS-Invoice Selection Report • Tax amount will be subtracted from Invoice Amount for Check Amount

36. Implementing NRA taxation in Accounts Payable • Start Check Process • Run checks like normal • We use Evisions Intellecheck process to print our checks • The stub will show the NRA tax amount under the Additional Charges column

38. Implementing NRA taxation in Accounts Payable • Finish Check Process • Run FABCHKR (Batch Check Register) • The report will show the NRA tax amount under the ADDL CHG/TAX column

40. Implementing NRA taxation in Accounts Payable • Finish Check Process • Run FABCHKA (Batch Check Accounting Process) • The taxes will go into the Liability Fund 110011 and Liability Account 23105

44. Implementing NRA taxation in Accounts Payable • Remove from 1099 table • A script is run nightly to remove the NRAs from the 1099 table (The script checks the federal withholding % on the vendor to see if is not null) • wkus_fin_NRA_del_FAB1099.sql • If you have existing reports that look at the Tax ID field for 1099 vendors, check to make sure the Federal Withholding field is null

45. Implementing NRA taxation in Students

46. Implementing NRA taxation in Students • Assessment of NRAs is made in Windstar • A file is exported out of Windstar (containing id, name, and tax information) • Transfer file to Banner environment (FTP, etc.)

47. Implementing NRA taxation in Students • Runs a Crystal Report with a stored procedure • Wkup_tax_intrfac_edit_student • Update/insert fields into ROBUSDF table • Update/insert citizenship code on SPBPERS table

48. Implementing NRA taxation in Students • Update/Insert fields in ROAUSDF • Four fields in ROAUSDF (Applicant User Defined Data) have been set up for Windstar data • Foreign Withholding Rate Fall • Current Year NRA % • Foreign Withholding Rate Spring • Next Year NRA % • Foreign Withholding Exemp Code Fall • Current Year NRA exemption code • Foreign Withholding Exemp Code Spring • Next Year NRA exemption code