GLACIER And Tax Withholding On Student Accounts

1. GLACIER And Tax Withholding On Student Accounts University of Arizona FSO-Tax Compliance June 2011

2. Who Is Taxed On Student Account With Treaty Exemption No Nonresident Aliens For Tax Purposes Without Treaty Exemption Taxed Foreign Students Resident Aliens For Tax Purposes No

4. What Can GLACIER Do? GLACIER determines if a foreign student is: • Resident Alien or Nonresident Alien for tax purposes • Qualified for treaty exemption Based on this information, we can determine whether we should tax the student

6. Who Is Required To Use GLACIER • Tax Compliance identifies students required to use GLACIER: -- Coded as International Student in UAccess -- Receive scholarship/stipend awards that exceed tuition and required fees • GLACIER administrator sends out an email through GLACIER to the student with login information

7. GLACIER Tax File Status • I – Incomplete - student has not input any information in GLACIER, the record is incomplete • W – Waiting - student has input information in GLACIER, but has not submitted the required tax forms and documents, waiting for documents • C – Complete - student has input information in GLACIER and submitted all necessary documents, the file is coded “complete” by a GLACIER administrator (Payroll, ISPS and Tax Compliance)

8. BGH Service Indicator For Tax Withholding In UAccess Student • A BGH service indicator is placed on every international student’s account unless the student is a resident alien or is granted income tax treaty benefits • When a NRA student without treaty benefits has a refundable credit, the student account is reviewed to determine if taxes need to be withheld • Once a tax assessment has been made, the BGH is temporarily released to allow the student to receive the funds • After the funds are released, the BGH is placed back on the student account

9. How Does It Work? PeopleSoft Query - a daily report that identifies students who: • Have a BGH Service Indicator • Have a credit balance These are the students we need to check in tax calculation program before the funds can be released

10. How To Calculate The Tax? • UAccess Student International Student Tax Calculation Program –an automatic program to calculate YTD tax • Total Taxable (scholarship) Income • Total Tax Amount • Total Taxed To Date • Net Tax to Apply

11. How Does The Program Work? What transactions are included in the calculation? • (A) Tuition charges and required fees to attend class or the University • (B) Tuition waivers/remissions, stipends, and scholarship awards • Total Taxable Income = (B) - (A) • Tax Rate: 14% mostly, 30% in some case, depending on student’s visa type

12. More To Know… • Students receiving cash awards do not have to be taxed – if the awards plus waivers are less than the tuitions and require fees – no taxable income • Total Taxable Income is subject to change during the year depending on the timing of charges and awards posted

13. Who Assesses Tax Withholding • Bursar – A/R assesses tax for batch checks/ACH transfers, based on the daily report • Bursar’s representatives assess tax on manual refund checks issued to walk-in students • Tax Compliance periodically reconciles the taxable income and taxes

14. Role Of ISPS (International Students And Programs Service) • ISPS does not place or remove BGH Service Indicator in UAccess Student • ISPS does not withhold tax on student accounts • ISPS acts as liaison for Tax Compliance and International Students for questions regarding the BGH Service Indicator and tax being withheld on scholarships

15. Summary: Who Does What • Tax Compliance: determines what is taxable (UAccess Student International Tax Calculator), who should use GLACIER, who should be taxed, and replaces & removes BGH when necessary • Bursar: charges applicable taxes, disburses funds, and removes & replaces BGH when necessary • ISPS: acts as liaison to answer student’s questions regarding tax withholding and BGH Service Indicator; receives tax documents