The Payroll Office has put together a list of some frequently asked questions that pertain specifically to foreign nationals.
You must file a tax return because the U.S. tax system is based on self-reporting of income. While the Form W-4 allows the university to withhold a certain tax amount each pay period, you must file an income tax return at the end of the tax year to determine whether you owe additional tax money or get a refund.
Whether you are in the U.S. or back in your country, you must file a tax return at the end of the tax year. Please use the CINTAX software available on the my AU Portal. The software is user-friendly and simple to follow. Once the CINTAX software program is updated for tax year, the ISSS office will e-mail all eligible foreign nationals sometime in February. If you have not received an AU PIN number at that time, please contact or e-mail the ISSS office. Please also refer to IRS Website to get IRS publications and forms. The Payroll Office cannot prepare a tax return for you. If you have unusual circumstances, please consult a professional tax advisor who is familiar with nonresident alien tax matters.
Please refer to Section V for types of payments and reporting requirements to find out whether you will be receiving both forms. You must include both Form W-2 and Form 1042-S when you file your tax return with the IRS, which is due April 15.
Please file your return by June 15.
Only if you are a resident alien for tax purposes. Form 1040EZ can be used by U.S. citizens, permanent resident aliens or resident aliens for tax purposes. Form 1040NR or 1040NR-EZ should be used by nonresident aliens for tax purposes.
There are two questions relating to this issue; are the foreign visitors allowed to work and receive payments from an immigration standpoint and are there any tax liabilities from an IRS standpoint? Generally individuals on a B-1 or B-2 visa are not authorized to work in the United States. However, a special provision was made for higher education institutions. The law permits a university to pay honoraria and incidental expenses for a usual academic activity lasting not longer than nine days at any single institution. The foreign national may not accept payment or expenses from more than five institutions within the previous six month period. Therefore, an academic honorarium certification must be completed by the foreign national. We recommend that you obtain the certification from the foreign visitor prior to finalizing a speaking engagement. The foreign national must also present a valid visa and Form I-94, Record of Arrival and Departure, as verification of immigration status.
As far as the taxes are concerned, honoraria payments are subject to 30 percent tax withholding absent tax treaty language to the country. Therefore, it is important for the foreign visitor to receive assistance from the Foreign National Specialist in the Payroll Office to maximize any tax treaty benefits. The dean may decide to gross up the payment and shoulder the tax liability for the individual. Please send a disbursement request form with the appropriate documents to the Payroll Office.
Yes, expense reimbursements can be processed through Accounts Payable. Accounts Payable will review the appropriate documents and process your requests. Those expenses are neither reportable, nor taxable as long as all the requirements have been met and those expenses are substantiated under the accountable plan rule defined by the IRS (see the independent personal service section). The same limitations regarding the length and the frequency of an academic activity should apply. Academic honorarium certification also must be completed by the foreign national in this case. We recommend that you obtain the certification prior to finalizing a speaking engagement.
You only need to file Form 8843 if you did not have U.S. source income. Interest earned by your U.S. bank account is not considered U.S source income for nonresidents.
If your graduate financial aid award requires a work (e.g., teach a certain number of hours a week) or a learning component, the work/learning component is considered services to be performed. Therefore, all or a portion of your financial aid award is taxable as compensation. Your friend at another university may have a different type of award without any service/work requirement
An income tax treaty may exempt an individual from paying tax on a portion of his/her income, depending on the type of income received, the amount of income received and the length of time the individual is present in the U.S. Each county has different tax treaty benefits. Please refer to IRS Publication 901.
Not necessarily. Residency status for immigration purposes may not be the same as residency status for tax purposes. Individuals who are in non-immigrant status may be resident aliens for U.S. tax purposes if they meet the substantial presence test.
Incorrect. "Exempt individuals" means you are exempt from counting days toward the substantial presence test - generally for five years if you are a student and two years if you are a scholar. It does not mean that you are exempt from tax liability.