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NONRESIDENT ALIEN TRAINING UNIVERSITY PAYROLL AND TAX SERVICES

NONRESIDENT ALIEN TRAINING UNIVERSITY PAYROLL AND TAX SERVICES. Housekeeping. Roster Break Restrooms Cell phones, pagers, text messaging Evaluations: within next 3 days you should receive email request to provide feedback on today’s class!

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NONRESIDENT ALIEN TRAINING UNIVERSITY PAYROLL AND TAX SERVICES

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  1. NONRESIDENT ALIEN TRAININGUNIVERSITY PAYROLL AND TAX SERVICES

  2. Housekeeping • Roster • Break • Restrooms • Cell phones, pagers, text messaging • Evaluations: within next 3 days you should receive email request to provide feedback on today’s class! • Workshop counts toward Pro3 certification—HR/Payroll Track

  3. To prepare departments involved with any type of monetary compensation with regards to foreign nationals To move through the process efficiently and accurately – from organizing the documentation to understanding the data for processing Objectives

  4. Today we will: Review some helpful introductory information Website VISA Information Describe the 3 stage process for paying a non-resident alien correctly at UF Stage 1 – Submit Foreign National Information Form and supplementary documentation Stage 2 – Enter into PeopleSoft based on tax classification Stage 3 – Submit paperwork to correct core office based on payment classification Agenda

  5. Today we will (cont.): Review some important reminders Practice! (throughout training) Agenda

  6. Let’s begin by reviewing some helpful introductory information

  7. Website Key Definitions • Resident Alien (for tax purposes) • Nonresident (for tax purposes) • Optional Practical Training (OPT)

  8. Website • http://www.fa.ufl.edu/departments/payroll-tax-services

  9. Website • NRA Withholding Requirements

  10. Website • NRA Withholding Requirements

  11. NRA Withholding Taxes • NRA withholding requirement – generally 30 percent • Unless reduced rate or exemption based on U.S. tax treaty benefits • Specific withholding requirements • Portion of scholarship payments for living expenses – 14 percent • Honoraria payments made to foreign visitors or scholars – 30 percent • Payments made to NRA independent contractors – 30 percent

  12. Website • Tax Forms @ www.fa.ufl.edu/forms-and-publications/forms

  13. VISA Information • The F-1 nonimmigrant visa designates a student (I-20) • Work authorized for the sponsoring University • Work authorized for the other University during Optional Practical Training (OPT) • Employment Authorization Card needed if I-20 is not updated • F-1 not eligible for Ind.Cont/Honor • The J-1 nonimmigrant visa designates a student or teacher/researcher for business (DS-2019) • If student, handle the same as a F-1 Visa holder • If teacher/researcher, work authorized for the sponsoring employer

  14. VISA Information • The J-2 nonimmigrant visa designates a spouse or child of a J-1 exchange visitor • Work authorized under certain circumstances • Must have Employment Authorization Card (EAD) • The B-1 nonimmigrant visa designates a temporary visitor for business • No work authorization • Eligible to receive reimbursement for travel expenses and per diem

  15. VISA Information • The B-2 nonimmigrant visa designates a temporary visitor for pleasure • No work authorization and not authorized to receive any type of payments • The WB nonimmigrant visa designates a visitor for business from a visa waiver country • No work authorization • The WT nonimmigrant visa designates a tourist from a visa waiver country • No work authorization

  16. VISA Information • The H-1B nonimmigrant visa category designates a temporary worker performing services in a “specialty occupation” • Work authorized for the sponsoring employer • The O-1 Nonimmigrant visa designates an individual of extraordinary ability in the sciences, education, business, athletics, or the arts • Work authorized for the sponsoring employer

  17. VISA Information • For more information on visa statuses and requirements, attend An International Affair: Sponsorship of Foreign Nationals for Employment-Based Immigration Statuses • Course number Pro317

  18. Questions?

  19. Let’s Practice!(See your handout)

  20. Let’s discuss the 3 stage process for paying a non-resident alien at UF

  21. Flowchart • Department & NRA • Foreign National Tax Info Form • Supporting Immigration Documents • Payroll & Tax Services • PeopleSoft Tax Withholding Form (PTWIF) • Coding and preparing forms for signature Department PeopleSoft Input (ePAF) Level 1 Approval Payroll & Tax Services – confirm dept input, FTE, etc. Level “1.5” Approval • Human Resource • OPS • TEAMS • Academic Personnel • GA, RA & TA • Fellowship • Post Doc • Medical Resident • Faculty • Award • Student Emp • Student Asst • Payroll & Tax Services • Royalty • Indep. Contractor • Add. Pay Scholarship • Honorarium Level 2 Approval

  22. Stage Detail – Stage 1 • Department & NRA • Foreign National Tax Info Form • Supporting Immigration Documents • Payroll & Tax Services • PeopleSoft Tax Withholding Form (PTWIF) • Coding and preparing forms for signature Department PeopleSoft Input (ePAF) Level 1 Approval Payroll & Tax Services – confirm dept input, FTE, etc. Level “1.5” Approval • Human Resource • OPS • TEAMS • Academic Personnel • GA, RA & TA • Fellowship • Post Doc • Medical Resident • Faculty • Award • Student Emp • Student Asst • Payroll & Tax Services • Royalty • Indep. Contractor • Add. Pay Scholarship • Honorarium Level 2 Approval

  23. Stage Detail – Stage 1 • Foreign National Information Form (FNIF)* Supplemental Documentation: • US VISA (F-1, J-1, H-1, B1/2, TN) • I-94 • I-20 (F-1), DS-2019 (J-1), I-797 (H-1) • Sponsor must be University of Florida • US Social Security Card (wages) or ITIN (non-wages) • I-9 (Employment Only) • Change of Visa requires new I-9 *Completed packets only

  24. Stage Detail – Stage 1 • Foreign National Information Form • Additional Documentation (Ind.Cont/Honor): • Consulting & Professional Services Worksheet • Certification of Academic Activity • 9-5-6 Rule • B-1, B-2, WB, WT • Invitation to Lecturer • Date of Lecture, copy of Engagement Announcement • Amount Offered • Additional Documentation (Fellowship): • Memorandum Of Understanding (MOU)

  25. Stage Detail – Stage 2 • Department & NRA • Foreign National Tax Info Form • Supporting Immigration Documents • Payroll & Tax Services • PeopleSoft Tax Withholding Form (PTWIF) • Coding and preparing forms for signature Department PeopleSoft Input (ePAF) Level 1 Approval Payroll & Tax Services – confirm dept input, FTE, etc. Level “1.5” Approval • Human Resource • OPS • TEAMS • Academic Personnel • GA, RA & TA • Fellowship • Post Doc • Medical Resident • Faculty • Award • Student Emp • Student Asst • Payroll & Tax Services • Royalty • Indep. Contractor • Add. Pay Scholarship • Honorarium Level 2 Approval

  26. Stage 2 – Tax Classification • To input the hire correctly into PeopleSoft, Payroll and Tax Services provides the correct tax classification • Are they classified (for tax purposes) as a Resident Alien or a Non-resident Alien?

  27. Substantial Presence Test: NRA or RA • Substantial Presence Test • This will determine if the foreign national is a Resident Alien (RA) or Non-resident Alien (NRA) for tax purposes • Resident Alien – subject to federal withholding taxes and FICA • Treated as US Citizen for tax purposes • Non-resident Alien – subject to federal withholding taxes, but not FICA

  28. Substantial Presence Test: NRA or RA • Substantial Presence Test • The test is met if the foreign national is physically present in the U.S. for at least: • 31 days during the current calendar year, and • 183 days during the 3-year period that includes the current year and the 2 years immediately before that, counting: • (a) all the days the foreign national was present in the current year, and • (b) 1/3 of the days the foreign national was present during the first preceding year, and • (c) 1/6 of the days that the foreign national was present in the second preceding year

  29. Substantial Presence Test: NRA or RA 1/6 of days present Prior Year 2 Prior Year 1 Current Year 183 or more = RA 1/3 of days present All days, must be > 31

  30. Substantial Presence Test: NRA or RA • Substantial Presence Test • Test Exemption • 5 Calendar years – treated as NRA • F-1 Student • J-1 Student • 2 Calendar Years – treated as NRA • J-1 Teacher/Researcher (Has six year look-back rule) • H-1B and TN – treated as RA for tax purposes • No Exemptions for any other VISA types

  31. Stage Detail – Stage 2 Level 1 Approval (Tax Classification) • Non-Resident Alien (NRA) • FICA Exemption • W-8BEN • W-4 Criteria (Not Editable) • Single • 1 Allowance (0 if for Ind.Cont/Honor or Royalty) • Treaty Exemption (Limitations) • Form 8233 (Independent Contractor should have personal liability insurance)

  32. Stage Detail – Stage 2 Level 1 Approval (Tax Classification) • Resident Alien (RA) • FICA Subject • W-9 • H-1B, F-2, J-2, Medical Residents • J-1 Teacher / Researcher • F-1, J-1 Student (Exempt if enrolled half time & working no more than 20 hours/week) • W-4 Criteria • Editable by Employee • Note: Must file a W-4 copy with Payroll & Tax Services if filling Exempt or claiming over nine Allowances

  33. PTWIF Coversheet • Income Code • Teacher / Researcher (8) • Student (9) • Treaty • Dependent or Independent Services • Form 8233 • Fellowship, Scholarship, Royalty, Other Inc. • Treaty Form W-8BEN

  34. PTWIF Coversheet • FICA • Subject / Exempt • Offices • Academic Personnel, HR, Student Employment

  35. Stage Detail – Stage 3 • Department & NRA • Foreign National Tax Info Form • Supporting Immigration Documents • Payroll & Tax Services • PeopleSoft Tax Withholding Form (PTWIF) • Coding and preparing forms for signature Department PeopleSoft Input (ePAF) Level 1 Approval Payroll & Tax Services – confirm dept input, FTE, etc. Level “1.5” Approval • Human Resource • OPS • TEAMS • Academic Personnel • GA, RA & TA • Fellowship • Post Doc • Medical Resident • Faculty • Award • Student Emp • Student Asst • Payroll & Tax Services • Royalty • Indep. Contractor • Add. Pay Scholarship • Honorarium Level 2 Approval

  36. Stage 3 – Payment Classification • You will submit paperwork (and approvals will route) based in part on the payment classification • Wages (I-9 Required) • Employment (Time/Labor) • Non-wages (No I-9 Required) • Non-employment

  37. Stage Detail – Stage 3 Level “1.5” & 2 Approval (Payment Classification) • Payroll (I-9 Required) • Academic Personnel - Wages • GA, TA, RA, Post Doc, Faculty • Office of Human Resource Services - Wages • OPS, TEAMS • Student Employment - Wages • Student Assistant

  38. Stage Detail – Stage 3 Level “1.5” & 2 Approval (Payment Classification) • Additional Pay (No I-9 Required) • Univ. Payroll and Tax Services – Non-wages • NRA Independent Contractor/Honorarium • NRA Awards • Academic Personnel – Non-wages • Fellowship • Resident Alien (RA) Awards

  39. Stage Detail – Stage 3 Level “1.5” & 2 Approval (Payment Classification) • Financial Aid (No I-9 Required) • Scholarships • Complete Scholarship Notification Document (SND) and Fund Transfer, then send to Student Financial Aid. • For more information on Scholarships, attend Managing Scholarship Process, course number Pro329

  40. Questions?

  41. Let’s Practice!(See your handout)

  42. Additional Payments • Foreign Entertainers • Withhold 30% tax unless: • Central Withholding Agreements, or • Tax treaty is available: Tres Reg1.1441-1(e)(4)(vii) • Moving Reimbursements – IRS Pub. 521 • Accountable Plan – No longer than 60 days • Foreign Vendors • Confirmation of service/product location • US EIN – if services performed in US • Signed W-8BEN

  43. Let’s review some important reminders

  44. Important Notes • PeopleSoft Home Address • Must be their foreign address • Contact Payroll & Tax Services immediately if there is a change in the foreign address • Temporary Tax Number • Social Security Number (wages) • ITIN (non-wages) • Let us know if you have groups visiting! • Year End Tax Forms • 1042-S (Mid March) • W-2 (End of January)

  45. Important Notes • Constructive Receipt • Treaties with Retroactive Clause • UK, India, Luxembourg, Netherlands, Thailand • Student hours for breaks and RA FICA exemption • Fall/Spring – NRA- 20 hours, RA (F1 or J1 student) limited to 20 hours per week • Summer: NRA- no limit, RA still limited to 32 hours per week • Update I-9’s and VISA information!

  46. Important Notes • Lump Sum Payment (LSP, LS8, LS9) • Not suitable for employment • Research Participant • For best business practice , the following should be included in an email: 1. Name of the study: 2. The amount: 3. What the participants actually do: 4. Name and UFID: 5. Detailed information on the purpose of the study: (attach Informed Consent Form)

  47. Important Notes • ePAF imaging • Do not forget to scan the FNIF and immigration documentation • SDN List (Specially Designate Nationals List) (http://treas.gov/offices/enforcement/ofac/sdn/) • Must check against the Blocked Persons list prior to submitting to Payroll & Tax Services • Please include a printout of the search • NOTE: do not type the entire name (e.g. first and last) to use for the search, just the name that is most unique (first or last name)

  48. Important Notes • Change of job and FICA • Check your cost center distribution! • Short Form • Must already be setup in Payroll • PeopleSoft I-9 data must be accurate • IRS Publication 901 • Entire list of countries with tax treaty • Includes breakdown based on income type

  49. Questions?

  50. Let’s Practice!(See your handout)

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