Non-Resident Taxation Information
Non-Resident Information for Departments

Do not assume that because a student/scholar has a foreign sounding name or speaks with an accent that they are NRA. NRA is defined by not having US citizenship or Permanent Residency. Permanent Residents are not required to see Jonathan. If a student/scholar does not tell you he/she is a NRA, then there are 3 ways to tell:

1. S/he checks the 3rd box in the attestation portion of the I-9 form.
2. S/he does not have a SS number.
3. S/he has a Social Security Card that reads "Valid For Work Only with DHS Authorization" or "Valid For Work Only With INS Authorization"

   

   
   If a student/scholar is identified at this point, stop all paperwork and have the student contact Jonathan for an appointment.

Once the student/scholar is identified as being a NRA, the first step is to contact Jonathan Nelson by phone or email (575-2158; nelsonj@uark.edu) to set up an appointment. All new students/scholars MUST have an appointment. The department or student can contact Jonathan for the appointment, typically appointments can be made for the same or next day, but certain times of the year (January, August) there may be a 2-3 day wait time. DO NOT JUST SEND THE NRA TO HUMAN RESOURCES! To make an appointment the following information is needed:

• Student's Full Name
• Does this student have an SSN
• Student's Email Address (does not have to be uark.edu account)
• Department Hiring Student (not the department in which the student is majoring)
• Country of Tax Residency (typically citizenship country)
• Visa Type (F-1, J-1, etc.)

At the appointment, the W4 will be complete as required by the IRS, I-9 and Direct Deposit will also be completed. During the appointment a pay simulation (Pay Breeze) will be completed, so the student will need to know their stipend amount or hourly rate to create an accurate estimation of their net income.

Do not enter a SUNE for NRAs. Human Resources will enter all SUNEs for NRAs. The NRA will not be paid until they meet with Jonathan.

NRAs are not required to have a SSN to begin work. The process to receive a SSN can take 4-8 weeks, which means we do not want a NRA to be working for 2 months without being paid, or denying them employment for 2 months. Human Resources will issue a "dummy" SSN at the time of the initial appointment. This number is valid for 60 days. When the NRA receives the "real" SSN, they MUST bring a copy to HR and the "dummy" number will be replaced with the "real" number. Due to FLSA regulations, you cannot employ a person and not pay them. Under no circumstance should departments be employing students without SSN and just not paying them until they receive the number. To download Social Security Application Packet for NRAs Click Here

Students who receive travel expenses in relation to their compensation/employment (attending a seminar, conference, etc. in relation to your employment) will not be taxed. This falls under the accountable plan which applies to all employees. You will enter this information as you would any student receiving travel reimbursements or expenses.

Students who receive travel expenses in relation to their scholarship/fellowship (attending a seminar, conference, etc) will be taxed at 14%. This includes travel reimbursement or payments made on your behalf. The 14% tax can be exempted due to an applicable tax treaty. To honor the tax treaty for travel expenses, the student must have a SSN or Individual Tax Identification Number (ITIN), NO EXCEPTIONS. Student Scholarship Eligible countries Click Here If you are unsure how the travel should be classified, contact Jonathan in Human Resources. For help in entering travel with taxation on BASIS, contact Eric Friend at 575-4250 or efriend@uark.edu.

Teacher/Researcher/Scholars who receive travel expenses in relation to their compensation (attending a seminar, conference, etc. in relation to your employment) will not be taxed. This falls under the accountable plan which applies to all employees. Travel reimbursements will be paid through the travel office.

Students Holding, F, J, M or Q visas may be taxed 14%. Contact Jonathan before making any payments to student visa holders from outside of the U of A.

Contact Jonathan before making Non U of A employee travel payments. These payments typically will not be taxed, but we must make sure the NRA is on a visa that will allow travel reimbursement.

If the NRA does not have a SSN, you will need to contact Jonathan to receive a "dummy" number in which to enter the NRA into the BASIS system. To receive a "dummy" number you must have the following information:

• NRA Full Name
• Country of Permanent Residence
• Reason for "dummy" number (travel reimbursement, honoraria, etc.)

Any Accounts Payable (including Foundation payments) made to NRAs, must first begin with Jonathan. This is similar to setting up an appointment with a new NRA student. I must have the following information:

• Payee's Full Name
• Email Address
• Visa Status
• Payment Amount and Reason for Payment

The Payee will then receive an email from our online tax compliance system - GLACIER. Once the payee completes GLACIER and faxes the documents to HR, HR will calculate their tax. If HR does not receive the forms, the payee will be taxed at 30%.

At the time HR receives the GLACIER information, a "dummy" number will be issued. "Dummy" numbers will not be issued until the payee completes GLACIER and has turned in the documents to HR. The NRA will apply for the ITIN number when they file their tax returns.

Accounts Payable payments to NRAs are taxed at a 30% rate, with only a tax treaty exception. To honor the tax treaty, the NRA must be eligible (eligibility is determined by GLACIER) and complete necessary tax treaty forms. Independent Contractor Eligible countries Click Here

If HR determines that a NRA payee should be taxed, contact Eric Friend 575-4250 or efriend@uark.edu for instructions on completing BASIS applications.

The department must contact Jonathan to verify the information on the NRA is current. The payment will be processed through payroll and will be taxed at 30%. NO EXCEPTIONS. The Award/Prize money will then be reported on a 1042S form and may be eligible for a tax refund.

The department must contact Jonathan to set up the information on GLACIER. You must provide the following information:

• Full Name of Student
• Visa Type
• Email Address

Once GLACIER is complete, then the check can be processed. No checks will be issued without completion of GLACIER. The payment will be processed through accounts payable and will be taxed at 30%. NO EXCEPTIONS. The Award/Prize money will then be reported on a 1042S form and may be eligible for a tax refund.

The procedure begins with pre-planning. Almost all of the potential issues can be taken care of before the person from another country arrives in the United States. To begin with, the foreign national coming to the University must enter under the correct visa if she or he is to be paid legally.

• Any student coming to the U.S. needs to be on an F-1 or J-1 student visa (and needs to go through processes required by International Students and Scholars.)
• A faculty member, post-doctoral fellow, researcher or person employed in another academic capacity needs to come on a J-1 professor, research scholar, short-term scholar or an H-1B visa (and needs to go through the processes required by International Students and Scholars.)
• A foreign national coming to perform independent contractor services (someone who will receive an honorarium, travel reimbursement, or other form of reimbursement) needs to come on a B-1 or B-2 visa in order to be able to receive an honorarium and travel reimbursement. Those on WV and VW visas can only receive travel reimbursement.

There are different tax treaties for every country, and each foreign national's situation can be interpreted differently or be affected by different circumstances. Because of the need for interpretation of IRS regulations, it is extremely important that departments contact Jonathan Nelson in Human Resources with any non-resident alien taxation issues. Jonathan's phone number is 575-2158 and her e-mail is nelsonj@uark.edu.

Jonathan needs to be contacted before the foreign national enters the country. Human Resources has recently purchased tax compliance software that will enable us to assess the foreign national's tax situation and compute the required taxes before she or he comes to the United States. Most or all of the required information can be submitted via e-mail.

Reviewing tax issues in advance will enable International Students and Scholars to assist in obtaining the correct visa for the foreign national. Otherwise, a foreign national can come to the United States expecting to receive an honorarium and travel expenses, but find that his or her visa is the wrong type and that under IRS regulations the University cannot make the payments that both the visitor and the department had planned on.