Foreign Visitor Payments

Honoraria and Reimbursements for Foreign Visitors

The following is from a Memo to Deans, Directors and Department Heads dated September 8, 2004:

Attached is the Honoraria and Reimbursements for Foreign Visitors Guidelines compiled by the Controller's Office to provide departments with guidance on how to process transactions with foreigners.   As with any document dealing with tax issues, it cannot be all-inclusive and many exceptions apply. Departments are urged to consult with the International Programs Office, Human Resources and the Controller's Office well in advance of any visit to minimize taxes and expedite payments. The issuance of this guide was prompted in part by recent changes in IRS regulations resulting in changes in the methods by which the campus can make payments to foreigners.

IRS Tightens Rules for Paying Certain Foreigners - The Internal Revenue Service recently made it more difficult for certain foreign visitors, generally J-1s, to get paid and to avail themselves of tax treaty benefits in connection with compensatory payments. The Controller's Office urges J-1 foreign visitors who do not already have a US Social Security Number or Individual Taxpayer Identification Number to apply for a US Social Security Number as soon as possible to avoid an automatic 30% withholding for lack of an identification number.

Issuance of Individual Taxpayer Identification Numbers (ITIN) by the Controller's Office - The IRS has also implemented changes affecting the issuance of Individual Taxpayer Identification Numbers (ITIN). The Controller's Office can create ITINs only for individuals in B-1 or Visa Waiver status with proper documentation. The Controller's Office will no longer be able to create ITIN numbers for dependents of Foreign Visitors. Individuals who are in dependent visa categories must submit their application for an ITIN (W-7 form) along with their tax return in order to apply for an ITIN number.

Requirements for Expense Reimbursements - The Controller's Office has revised its procedures for reimbursing expenses to foreign visitors.  Foreign persons who do not have a SSN or ITIN # will no longer be required to obtain one to be reimbursed for expenses with valid receipts. Foreigners who already have SSNs or ITINs need to provide them for vendor history purposes at the time of reimbursement. In addition, the Foreign Visitors Information Form is no longer required to be completed and employee candidate reimbursements require only the W8-Ben Form.

Honoraria and Reimbursements for Foreign Visitors Guidelines

Payments of Honoraria and Reimbursements are based on the visa status of the individual and are subject to the visa constraints and the IRS tax liabilities. Please be aware that just by completing the following forms does not lead to an automatic exemption from withholding or eligibility for payment. The procedures below generally apply to F-1, J-1, B-1, and H-1.

Questions to ask your visitor before they come to University of Massachusetts , Amherst :

  • What is his/her visa status when coming into the country?

(Canadians/Mexicans do need an entry stamp and visa status in order to get paid for business)

  • What is their country of tax residency?
  • Is the visitor a resident alien or non resident alien for tax purposes in the US ?
  • Does he/she have a social security number or ITIN in the US ?
  • Are you paying them for Reimbursement?
  • Are you paying them for Honorarium?
  • How much money will they be getting paid?

If you are unclear as to how to get a visa for an individual or you need information about different visas, please contact the International Programs Office 545-2710.

After you have found out the information above and reviewed this document, set up an appointment for your visitor with the AssistantA/P Supervisor in the Controller's Office 545-4710.

When sending in your information, please attach a note stating whether you would like them paid for Honorarium or Reimbursement or both. If the payment is for foreign source payments, please note it on the top of the W8BEN Form.

Resident Aliens

" The fact that an individual is a citizen of a country with which the United States has a tax treaty is not sufficient to grant tax treaty benefits to the individual." "Residency does not refer to legal residency but rather to tax residence, although the two may be the same." U.S. Tax Guide for Foreign Persons and Those Who Pay Them , Paula N. Singer, Esq., Copyright 2001-2004 Windstar Publishing, Inc.

*Reimbursements/Honoraria - The Foreign Visitor must meet Permanent Resident Test (Green Card Test) or Substantial Presence Test (183 day rule).

Forms to be completed: W-9 and copy of Residency Card

•  All forms must have original blue pen signatures.

Filing Form: 1099 MISC for honoraria and no form for reimbursements

Reimbursements for Faculty Candidates - Potential Employees

Forms to be completed: W8BEN

•  All forms must have original blue pen signatures.

Filing Form: None

B-1 and Visa Waiver Business Status (VWB)

B-1 Individual in the US to engage in certain business activities related to the individuals overseas employer. May be reimbursed travel expenses. The individual may not work or be paid for independent contractor services with one exception for an honorarium paid by a not-profit institution if certain criteria are met: honorarium is not to last more than 9 days, is for the benefit of UMass and the individual has not accepted honoraria from more than 5 institutions within the last 6 months.

VWB Individual permitted to enter the US for business without a visa. Laws for employment are generally the same as those for a B-1 visa holder.

*Reimbursements: If the individual has a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), they must supply it.

Forms to be completed: W-8BEN, Copy of Visa, Passport and Entry Stamp and B/VWB Eligibility Certificate (Candidates for employment on campus need only fill out a W-8BEN form)

•  All forms must have original blue pen signatures.

Filing Form: None

Honoraria : The individual must come to the Controller's Office in 405 Goodell Building to process the paperwork; it generally takes 10 - 20 minutes.

The individual must be a tax resident of a country that has a tax treaty with the U.S. to avoid an automatic 30% withholding.
If the individual does not have a SSN or ITIN, the department can either choose to withhold at 30% or the individual can start the creation of an ITIN number (additional forms W-7, W-7 eligibility certificate and the individual must be present in the Controller's Office)

Forms to be completed: W-8BEN, Foreign National Visitor Form, Copy of Visa, Passport and Entry Stamp, B/VWB Eligibility Certificate, 8233 Form, and Exemption Certificate (The 8233 and Exemption Certificate are completed through the WindStar Tax Navigator Program in the Controller's Office)

•  All forms must have original blue pen signatures.

Filing Form: 1042-S

F-1 and J-1 Visas

F-1 Academic or language training student admitted for duration of stay. The individual may be employed on Campus. No Employee Authorization Card (EAD) needed. The individual may be employed off campus for economic reasons. EAD required. The individual may be authorized for curricular practical training . No EAD required. May be authorized for optional practical training. EAD required.

J-1Non-Student, sub-categories include Research Scholar, Short Term Scholar, Teacher, Alien Physician, etc. The Individual may engage in the activity authorized by the DS-2019 (SEVIS) categories.

J-1 Student, category checked on DS-2019 (SEVIS) admitted as a student for duration of stay under the Exchange Visitor Program The individual may be authorized by the responsible officer at the institution for optional practical training.

*Reimbursements: If the individual has a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), they must supply it.

Forms to be completed: W-8BEN, Copy of Visa, Passport and Entry Stamp, and Letter from Sponsoring Institution (IPO) authorizing work (Candidates for employment on campus need only fill out a W8BEN form)

•  All forms must have original blue pen signatures.

Filing Form: None

Honoraria : The individual must come to the Controller's Office in 405 Goodell Building to process the paperwork; it generally takes 10 - 20 minutes.

The individual must be a tax resident of a country that has a tax treaty with the U.S. to avoid an automatic 30% withholding.
If the individual does not have a SSN or ITIN, the individual will be withheld at 30%.
These visitors should also be prepared to give a list of their previous visits by date and previous status on those dates.

Forms to be completed: W-8BEN, Foreign National Visitor Form, Copy of Visa, Passport and Entry Stamp, Letter from the Sponsoring Institution (IPO) authorizing work, 8233 Form, and Exemption Certificate (The 8233 and Exemption Certificate are completed through the Windstar Tax Navigator Program in the Controller's Office)

•  All forms must have original blue pen signatures.

Filing Form: 1042-S

H1B Visa

H1B - An Individual in the United States performing professional services for a sponsoring employer for a specified period of time.

*Reimbursements: If the individual has a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), they must supply it.

Forms to be completed: W-8BEN, Copy of Visa, Passport and Entry Stamp, and Letter from Sponsoring Institution (IPO office) authorizing work.

•  All forms must have original blue pen signatures.

Filing Form - None

Honoraria Payments are not allowed

Foreign Source

Foreign Source - An Individual is providing services while being in their own country and will not be physically in the U.S.

Forms to be completed: W-8BEN (individual) or W-8ECI (company), Letter stating that they are providing services while in their own country

•  All forms must have original blue pen signatures.

Filing Form - None

Green Card

U.S. Citizen

Forms to be completed: W-9 and Copy of the Green Card

•  All forms must have original blue pen signatures.

Filing Form - 1099 MISC

 

*  Reimbursements  require a SSN or ITIN if the reimbursement  is for expenses  that are  not  primarily related either to  employment  services or  to independent personal services rendered to the University.  For example a travel reimbursement to a nonresident researcher that does not "benefit" UMass is generally deemed a scholarship and is subject to tax withholding, tax reporting, and the attendant need for an ITIN and SSN.