Employment Payments, Disbursements and Travel Reimbursements to Nonresident Aliens (NRA)
John P. Kruczek, University Controller
The Bureau of State Payrolls (BOSP) has issued a revised Volume 5, Section 15 of the State Payroll Manual, Payments Made to Nonresident Aliens. This section of the manual covers the processing procedures and federal employment tax and information return reporting requirements applicable to payments to nonresident aliens. Although Section 15 is part of the Payroll Manual, please note that it also includes rules and procedures for processing payments through University Disbursement Services and other satellite disbursements offices. This section of the manual is available on the Internet at http://www.dbf.state.fl.us/bosp/nra_a.html. It is the most current source of information on this subject.
Effective March 1, 1998, when processing a Nonresident Alien payment, including employment, independent contractor, fellowship/scholarship and travel expenses, the following procedures must be followed:
All requests for payments to Nonresident Aliens should include a completed Foreign National Information Form. A copy of this form is attached for your reference and may be duplicated. It may also be downloaded from the Finance and Accounting website or University Tax Services forms page. If web access is not available, forms may be requested from University Tax Services by phone at 392-1324 or email at email@example.com.
The completed Foreign National Information Form should be forwarded to University Tax Services, Attn: Steve Sauls, at FAX 392-4760 or by mail to PO Box 113200. Please indicate a department name, telephone number, fax number, PO Box number, and contact person for the department.
The information on the completed Foreign National Information Form will be entered into software that analyzes the non-resident alien’s residency status and their eligibility for exemption of income from taxation through tax treaty. The software will generate a W-4, W-7, Form 8233, or other forms as appropriate. The forms will be returned to you within two (2) working days for appropriate signature(s). Obtain the original signature(s) and attach the Foreign National Information Form and all other appropriate forms to the following:
1. All employee appointments submitted to Academic Personnel, Student Employment, and University Personnel Services for new hires and visa status extensions.
2. All payment requests submitted to University Disbursement Services or other satellite disbursements offices. Please note that all non-resident alien payment requests, including travel, must be routed through University Tax Services before forwarding to the appropriate disbursement processing area, otherwise payment may be delayed due to the disbursement processing area routing the payment back through University Tax Services.
Please note that travel reimbursements to nonresident alien independent contractors are now considered to be covered under the “accountable plan” rules. Simply stated, these rules allow that documented business travel expense payments do not constitute income to an individual. Under this plan, expenditures for travel, including airfare, will be exempt from taxes regardless of tax treaty.
The Travel Authorization Request (TAR) should include the nonresident alien’s social security number (SSN) or individual taxpayer identification number (ITIN). If the traveler does not have either of these, and will only have travel expenses paid, a substitute number will be assigned. When payments to a nonresident alien include both services and travel, an ITIN or social security number must be obtained. If the person does not have an SSN and has applied for an ITIN, a copy of the completed Form W-7, Application for IRS Individual Taxpayer Identification Number, must be attached and a temporary number will be assigned. This number is to be used for all payments until it can be replaced with the ITIN. (When completing Form W-7, the department should complete line 3 of Form W-7 with their departmental address. When the department is notified by the IRS of the ITIN, it is the department’s responsibility to notify University Tax Services so that the temporary number can be replaced with the ITIN.)
We are pleased to announce that Steve Sauls, University Tax Services, will be handling the nonresident alien tax issues for the University of Florida. If you have any questions regarding these procedures or need assistance with planning for foreign visitors, please contact him at (352) 392-1324, SC 622-1324 or email him at: firstname.lastname@example.org.