Payroll - Types of Payments, Methods and Tax Reporting

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  • Payroll Office
    202-885-3520
    Fax: 202-885-1033
    payroll@american.edu
    New Mexico, Room 350

    9:00am to 5:00pm

Mailing Address

Types of Payments, Methods and Tax Reporting to IRS


The table below illustrates types of payments to foreign nationals, AU's methods of payments, and tax reporting requirements to the IRS:

 

Type of Payment

 

Recipient

 

 

AU Method of Payment

 

Taxation

 

Reporting to the IRS

 

Teaching

Faculty

Faculty appointment letter; contract

Taxable compensation with graduated withholding rates;

Exempt under treaty

W-2;

 

 

 

 

1042-S

Part-time wages

Student

Personnel action form and e-timesheets

Taxable compensation with graduated withholding rates;

Exempt under treaty

W-2;

 

 

 

 

1042-S

Graduate scholarship/fellowship stipend without work/learning component

Student

 

Financial aid data entered by teaching unit; stipend payments through the HR system.Submitted on GFA stipend authorization orGATR forms

Taxable at 14% provided recipient is an F, J, M or Q immigration status, unless exempt under treaty

 

1042-S

 

Graduate scholarship/fellowship remitted tuition without work/learning component

Student

 

Financial aid data entered by teaching unit; remitted tuition credited to student account.Submitted on GFA stipend authorization or GATR forms

Qualified portion not taxable under IRC section 117.

 

No reporting required.

 

Graduate scholarship/fellowship stipend with work/learning component

Student

 

Financial aid data entered by teaching unit, stipend payments through the HR system.Submitted on GFA stipend authorization orGATR forms

Taxable for a work component as compensation with graduated withholding rates;

Non-qualified scholarship table at 14% provided recipient is an F, J, M or Q immigration status, unless exempt under treaty.

W-2;

 

 

 

 

 

1042-S

Graduate scholarship/fellowship remitted tuition with work/learning component

Student

 

Financial aid data entered by teaching unit; remitted tuition credited to student account.Submitted on GFA stipend authorization form orGATR forms

 

Taxable for a work component as compensation with graduated withholding rates.

W-2

 

 

 

Athletic room and board

Student athlete

Room and board payments by student account

Non-qualified scholarship taxable at 14% provided recipient is an F, J, M or Q immigration status, unless exempt under treaty.

 

1042-S

Prizes

Student, faculty, employee

Employee – submitted on Hiring Form; Non-employee – submitted onDisbursement Requests

Taxable at 30% to nonresident aliens;

No tax treaty available. No tax withheld for resident aliens

1042-S;

 

 

1099 Misc (over $600)

 

 

Independent personal services

Contractor

Professional service agreementand disbursement request form

Taxable at 30%;

Exempt under treaty

1042-S;

 

1042-S

Expense Reimbursements

Faculty, employees,

foreign guest speakers

Disbursement Request

Non taxable provided reimbursement is processed under the “accountable plan” rules

No reporting required.