Procedures for Paying Nonresident Alien (Non U.S. Citizen) Visitors/Contractors
- Overview
- Tax Treaty Eligibility for Non-Resident Alien
- Non Resident Alien – Independent Personal Service Payment Eligibility Matrix
- Requesting Payment for a Non-Resident Alien – Activities taking place in the U.S.
- Foreign National Information Form for Contractors (FNIF)
Overview
The United States Bureau of Citizenship (BCIS), and the Internal Revenue Service (IRS) have set guidelines that the University must follow in order to make a payment to a Non-Resident Alien (NRA), i.e. Foreign National. In order to request a payment for an NRA for any type of independent personal service, their eligibility for payment must first be determined. Most visitors who enter the U.S. on a B-1/B-2 tourist visa or visa waiver are eligible to receive Honoraria from the University. Visitors in other visa statuses must be evaluated on a case by case basis.
Independent Personal Services include:
- Honorarium
- Performance Fees
- Lectures
- Professional Services
Visitors who receive any of these payments are generally subject to 30% federal tax withholding, unless the amounts are either exempt under the terms of a tax treaty, subject to a lower or reduced tax rate under a tax treaty, or exempt from tax under the Internal Revenue Code. In Section 1441 of the Internal Revenue Code it states that the withholding agent must withhold taxes for NRAs. Loyola University Chicago is held responsible for accurate and timely tax withholding. If an error should occur, the University is liable for the tax payment and/or penalties associated with that payment.
Tax Treaty Eligibility for Non-Resident Alien
For an NRA to be eligible for a tax treaty, the following criteria must be met:
- Treaty must exist between U.S. and home country
- Compensation being paid must be covered in the treaty
- Must possess a Social Security Number or a U.S Tax Payer Identification Number (ITIN)
- Must complete tax treaty forms 8233 or W-8BEN as applicable
- General Accounting must evaluate whether an NRA is eligible for payment and if any tax withholding/tax treaty benefits will apply. In order to do so, they must review the NRA’s current and prior immigration history.
It is important, that before any type of payment and or reimbursement is promised to a visitor that the department makes sure the visitor is in a status that will permit them to receive payment.
Non Resident Alien – Independent Personal Service Payment Eligibility Matrix by Visa Status and Visa Description
|
Employment Restrictions |
Honoraria & Reimbursement |
|
B-1: Visitor for Business: An individual in the U.S. for a short period of time to engage in such business activities as consulting, attending professional conferences, conducting independent research. |
|
|
Foreign visitors present in the U.S. on a B-1/B-2 visa are not permitted to be employed in the U.S. |
Eligible to receive Honoraria if: Time at LUC is 9 days or less Has not been paid or reimbursed expenses from more than five U.S. institutions within the previous six month period. Service is limited to regular academic activity conducted for the benefit of LUC(most often lecture/speaking/presentation fee) |
|
F-1: Student: An individual in the U.S. engaging in a full course or academic study at an accredited academic educational program. |
|
|
May work up to 20 hours per week on the campus of the school authorized to attend. May be authorized to work off campus by the Designated School Official for “Curricular Practical Training” or “Optional Practical Training” which will be designated on their Form I-20. An Employment Authorization Document (EAD) is required |
Cannot be paid honoraria unless authorized to work for CPT on the I-20 Form or with an EAD card. Must present verification of valid immigration status. Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
H-1B: Temporary Worker in a Specialty Occupation: An individual in the U.S. to perform services of a professional nature for a sponsoring employer in a specific position for a fixed period of time |
|
|
Can only be employed by the petitioning organization through whom the visa classification was obtained. |
Cannot be paid Honoraria. Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
J-1: Exchange Visitor (Scholar, Researcher, Professor): An individual in the U.S. as a visiting researcher or professor under the auspices of the U.S Department of State and a Designated Sponsor. |
|
|
May work for program sponsor of J-1 visa and may be authorized by the program sponsor for an occasional lecture |
Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
J-1: Student: An individual in the U.S. as a student under the auspices of the U.S. Department of State and a Designated Program Sponsor. |
|
|
May work up to 20 hours per week (incident to status) on the campus of the school authorized to attend. May be authorized to work off campus by the Responsible Officer, authorized in letter or DS-2019. |
Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
WB: Visa Waiver for Business: An individual permitted to enter the U.S. without a visa for a stay limited to 50 days. Limited to those citizens from countries under the Visa Waiver Program. |
|
|
Foreign visitors in the U.S. in WB or WT status are not permitted to be employed in the U.S. |
Eligible to receive Honoraria if: Time at LUC is 9 days or less Has not been paid or reimbursed expenses from more than five U.S. institutions within the previous six month period. Service is limited to regular academic activity conducted for the benefit of LUC(most often lecture/speaking/presentation fee) |
Requesting Payment for a Non-Resident Alien – Activities taking place in the U.S.
Does your visitor fall under one of the categories above eligible to receive payment? If so, then here are the next steps:
What should the sponsoring department do before the visitor arrives at LUC?
- Send the Foreign National Information Form for Contractors (FNIF) to the visitor to fill out (All prior immigration history should be noted to the best of their ability)
What should the sponsoring department do when the visitor arrives at LUC?
- Collect the FNIF from the visitor, make sure it is properly filled out and signed
- Visitors on a B-1/B-2 or VWB/VWT must fill out and sign the Compliance Statement
- Collect copies of the following documents:
- Copy of Passport Identification Page
- Electronic I-94 Departure Record (Not applicable to those on Visa Waiver)
Can be obtained here: www.cbp.gov/I94 - Copy of Current Visa (Not applicable to those on Visa Waiver)
- Send all the documents above with the Accounts Payable Payment Requisition or Wire Transfer request.
*Note: if the visitor wishes to claim tax treaty benefits and is eligible, there will be additional forms that will need their signature which will be generated by General Accounting and sent to the department for visitor signature.
If you have any questions on requesting a payment for a future visitor, please contact Maria Araque at maraque@luc.edu.
- Overview
- Tax Treaty Eligibility for Non-Resident Alien
- Non Resident Alien – Independent Personal Service Payment Eligibility Matrix
- Requesting Payment for a Non-Resident Alien – Activities taking place in the U.S.
- Foreign National Information Form for Contractors (FNIF)
Overview
The United States Bureau of Citizenship (BCIS), and the Internal Revenue Service (IRS) have set guidelines that the University must follow in order to make a payment to a Non-Resident Alien (NRA), i.e. Foreign National. In order to request a payment for an NRA for any type of independent personal service, their eligibility for payment must first be determined. Most visitors who enter the U.S. on a B-1/B-2 tourist visa or visa waiver are eligible to receive Honoraria from the University. Visitors in other visa statuses must be evaluated on a case by case basis.
Independent Personal Services include:
- Honorarium
- Performance Fees
- Lectures
- Professional Services
Visitors who receive any of these payments are generally subject to 30% federal tax withholding, unless the amounts are either exempt under the terms of a tax treaty, subject to a lower or reduced tax rate under a tax treaty, or exempt from tax under the Internal Revenue Code. In Section 1441 of the Internal Revenue Code it states that the withholding agent must withhold taxes for NRAs. Loyola University Chicago is held responsible for accurate and timely tax withholding. If an error should occur, the University is liable for the tax payment and/or penalties associated with that payment.
Tax Treaty Eligibility for Non-Resident Alien
For an NRA to be eligible for a tax treaty, the following criteria must be met:
- Treaty must exist between U.S. and home country
- Compensation being paid must be covered in the treaty
- Must possess a Social Security Number or a U.S Tax Payer Identification Number (ITIN)
- Must complete tax treaty forms 8233 or W-8BEN as applicable
- General Accounting must evaluate whether an NRA is eligible for payment and if any tax withholding/tax treaty benefits will apply. In order to do so, they must review the NRA’s current and prior immigration history.
It is important, that before any type of payment and or reimbursement is promised to a visitor that the department makes sure the visitor is in a status that will permit them to receive payment.
Non Resident Alien – Independent Personal Service Payment Eligibility Matrix by Visa Status and Visa Description
|
Employment Restrictions |
Honoraria & Reimbursement |
|
B-1: Visitor for Business: An individual in the U.S. for a short period of time to engage in such business activities as consulting, attending professional conferences, conducting independent research. |
|
|
Foreign visitors present in the U.S. on a B-1/B-2 visa are not permitted to be employed in the U.S. |
Eligible to receive Honoraria if: Time at LUC is 9 days or less Has not been paid or reimbursed expenses from more than five U.S. institutions within the previous six month period. Service is limited to regular academic activity conducted for the benefit of LUC(most often lecture/speaking/presentation fee) |
|
F-1: Student: An individual in the U.S. engaging in a full course or academic study at an accredited academic educational program. |
|
|
May work up to 20 hours per week on the campus of the school authorized to attend. May be authorized to work off campus by the Designated School Official for “Curricular Practical Training” or “Optional Practical Training” which will be designated on their Form I-20. An Employment Authorization Document (EAD) is required |
Cannot be paid honoraria unless authorized to work for CPT on the I-20 Form or with an EAD card. Must present verification of valid immigration status. Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
H-1B: Temporary Worker in a Specialty Occupation: An individual in the U.S. to perform services of a professional nature for a sponsoring employer in a specific position for a fixed period of time |
|
|
Can only be employed by the petitioning organization through whom the visa classification was obtained. |
Cannot be paid Honoraria. Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
J-1: Exchange Visitor (Scholar, Researcher, Professor): An individual in the U.S. as a visiting researcher or professor under the auspices of the U.S Department of State and a Designated Sponsor. |
|
|
May work for program sponsor of J-1 visa and may be authorized by the program sponsor for an occasional lecture |
Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
J-1: Student: An individual in the U.S. as a student under the auspices of the U.S. Department of State and a Designated Program Sponsor. |
|
|
May work up to 20 hours per week (incident to status) on the campus of the school authorized to attend. May be authorized to work off campus by the Responsible Officer, authorized in letter or DS-2019. |
Can be reimbursed for expenses as allowed under the University’s Travel & Business Expense Policy. |
|
WB: Visa Waiver for Business: An individual permitted to enter the U.S. without a visa for a stay limited to 50 days. Limited to those citizens from countries under the Visa Waiver Program. |
|
|
Foreign visitors in the U.S. in WB or WT status are not permitted to be employed in the U.S. |
Eligible to receive Honoraria if: Time at LUC is 9 days or less Has not been paid or reimbursed expenses from more than five U.S. institutions within the previous six month period. Service is limited to regular academic activity conducted for the benefit of LUC(most often lecture/speaking/presentation fee) |
Requesting Payment for a Non-Resident Alien – Activities taking place in the U.S.
Does your visitor fall under one of the categories above eligible to receive payment? If so, then here are the next steps:
What should the sponsoring department do before the visitor arrives at LUC?
- Send the Foreign National Information Form for Contractors (FNIF) to the visitor to fill out (All prior immigration history should be noted to the best of their ability)
What should the sponsoring department do when the visitor arrives at LUC?
- Collect the FNIF from the visitor, make sure it is properly filled out and signed
- Visitors on a B-1/B-2 or VWB/VWT must fill out and sign the Compliance Statement
- Collect copies of the following documents:
- Copy of Passport Identification Page
- Electronic I-94 Departure Record (Not applicable to those on Visa Waiver)
Can be obtained here: www.cbp.gov/I94 - Copy of Current Visa (Not applicable to those on Visa Waiver)
- Send all the documents above with the Accounts Payable Payment Requisition or Wire Transfer request.
*Note: if the visitor wishes to claim tax treaty benefits and is eligible, there will be additional forms that will need their signature which will be generated by General Accounting and sent to the department for visitor signature.
If you have any questions on requesting a payment for a future visitor, please contact Maria Araque at maraque@luc.edu.