International Faculty, Staff, Students & Visitors
Tax and Payment Information
The appropriate tax withholding and reporting for any and all payments that arise from U.S. sources is based first on the residency status of the payee. For U.S. tax purposes, there are four residency statuses:
- United States Citizen
- Permanent Resident Alien
- Resident Alien for tax purposes
- Nonresident alien for tax purposes.
Payments to residency statuses 1, 2 and 3 are taxed and reported in the same manner as those made to U.S. Citizens. If the foreign national to whom the payment is made qualifies as a "nonresident alien" under U.S. tax law, a special set of income tax withholding and reporting rules apply.
To determine an individual tax residency status, apply the "green card" and "substantial presence" tests.
FICA Tax
As a general rule, individuals who receive compensation as an employee in the U.S. are subject to FICA tax; however, individuals who meet all three of the following criteria will be exempt from FICA.
- a nonresident alien for tax purposes
- present in the U.S. under an F, J, M or Q immigrations status; and
- the primary holder of the visa (i.e., the "-1" visa holder)
Federal and State Income Tax
As a general rule, all payments from U.S. sources made to a nonresident alien are taxable unless the payment can be excluded or exempted from income tax withholding under a tax treaty between the United States and the foreign national's country of residence.
Note: Payments can be subject to withholding for FICA only, Federal and State Income Tax only, neither tax or both taxes.