1. Paying NRA’s and Foreign Businesses “W8’s and Heartbreaks”
Panel of Presenters
Payroll – Anita Gurule
OPAA – Lisa Silbernagel
FA&A – Rae Lee Aguilar
Vendor Maintenance – Mary Page

2. Presentation - Outline
Who is our expert panel?
Who Qualifies as an Non-Resident Alien?
What are typical payments made to NRAs?
What FIS Policy has changed?
413: Non-Resident Aliens (NRA)
What new materials are available?
Payroll, Fellowships, Foreign Entities, Honorarium and Travel.
Q + A
Please hold questions until the end of the presentation

3. Non-Resident Alien Resources at OSU
Name of Department
Responsibilities
Contact Person
Address/ Office
Phone Number
Finance Accounting & Analysis
Payment for Services &Travel
Siora Arce
100 Kerr Administration Bldg
(541)
Human Resources
Employment and
Affiliate/Courtesy Faculty members
Business Centers
or visit
(541)
International Student & Faculty Services (ISFS)
Visas/Advise
Charlotte Ross
Snell Hall 444
(541)
International Student &Faculty Services (ISFS)
Visas/Advice
Jackie Bangs
(541)
Payroll Office
Wage, payroll
Anita Gurule
B106 Kerr Administration Bldg
(541)
Post Award Administration
Fellowships (Stipends)
Lisa Silbernagel
B306 Kerr Administration Bldg
(541)
Vendor Maintenance
Mary Page
(541)
Social Security Office
Issues SSN and Form SS-5
Main Office
1055 Bain St SE Albany, OR 97322
( )
Procurement
Personal Service Contracts
Tamara Bronson
Property Services Building PACS
(541)

4. Who Qualifies as a Non Resident Alien?
You are considered a non resident alien if you can NOT meet one of the following two tests for the calendar year:
Green Card Test
Substantial Presence Test
You must have been physically present in the United States on at least:
31 days during the current year, and
183 days during the 3 year period that includes the current year and the 2 years immediately before. To satisfy the 183 days requirement, count:
All of the days you were present in the current year, and
One-third of the days you were present in the first year before the current year, and
One-sixth of the days you were present in the second year before the current year.

5. Examples of Payments made to NRAs
Wages/Compensation
Stipends
Travel & Expense Reimbursements
Scholarships/Fellowships (Note: Payments do not have to be paid in cash; credits to a student's account qualify under these requirements.)
Independent Contractor Payments
Royalties/Commissions
Each payment requires the review of certain key factors:
Visa Type, Residency Status, Substantial Presence Test.

6. FIS Policy Changes? 413: Non-Resident Aliens (NRA)
413-01: Payment for Services and Travel
413-02: University Employment
413-03: Scholarships and Fellowships
413-04: Foreign Businesses

7. Financial Accounting & Analysis
Honorariums
A compensation payment of money for the person’s participation in a usual academic activity or activities.
Includes lecturing, teaching, consulting, conducting research, attending meetings or seminars or otherwise sharing knowledge.
9/5/6 rule
Honorarium must be from no more than 5 institutions within a 6 month period for usual academic activities lasting for not more than 9 days.
The 9 days is the time limit for each visit
Only the days when the NRA engages in the academic activities during the visit are counted against the 9 days
OSU can be institution #5- but not #6 for application of these rules.
Allowable Visa Types w/ restrictions
B1/VWB and the B2/VWT- do not need visa sponsor, can be paid an honorarium and associated expenses for usual academic activities, subject to restrictions. (the rule)
Honorarium Taxability
Payments are subject to federal income tax withholding at 30% unless specifically exempted by an income tax treaty.
Tax Treaties
United States has tax treaties with over 50 countries.
Each treaty is unique
To claim tax treaty exemption appropriate documentation must be provided.

8. Travel Reimbursements
FA&A Continued…
Travel Reimbursements
Travel expenses incurred with an OSU business purpose ; such as airfare, rental car, ground transportation, meal per diems, lodging, etc. may be reimbursed.
Travel expenses with proper documentation and receipts are not subject to tax withholding.
Documentation must follow OSU Travel Policy FIS Refer to policy for guidance.
In some rare cases, NRA’s may not be eligible to receive a travel reimbursement based on immigration regulations. Therefore, prior to extending an offer to reimburse expenses verify NRA is eligible. A1/A2 visa types not eligible per INA Section 212(q)
The 9/5/6 rule applies to travel reimbursements also.

9. Flow Chart

10. Payroll
CO-NRA - Oregon University Systems Alien Information Request Form
Central Payroll and the OUS Controller’s office use the CO-NRA to determine an employee’s tax status.
The CO-NRA is required for all Non-Resident Alien employees, including those with H1-B, E3, and TN visas.
Required on initial hire, renewed annually, and when a change in status. (Example: Visa change, eclass change)
Copies of the I-94 and I-20 or DS-2019 must accompany the CO- NRA.

11. Payroll Continued… Non-Resident Alien W-4 Filing REQUIREMENT
Box 3 - Single
Box 5 – 0 or 1 Allowance
Exceptions for Canada, Mexico, Korea, and students from India
Non-Residents are not allowed to file EXEMPT (defaulted to single 0)
Must have SSN. If no SSN received, leave blank and send copy of receipt.
Please refer to instructions at IRS site:

12. Payroll Continued… Tax Treaties - Form 8233
More than 46 available tax treaties available.
Not guaranteed that an employee is eligible for a tax treaty.
Country and status type (teaching / research vs. student / trainee) specific.
The 8233 must be accompanied by an Attachment Letter (Attachment Letters are available in the Central Payroll Office.)
More information concerning tax treaties is available in IRS Publication 901.

13. Foreign Entities
If you are paying a Stipend, Payment for Services or Travel Reimbursement for a foreign individual then you need to use the Policy 413 Payments to Non-Resident Aliens.
Payers are responsible for requesting a Form W-8 from any business entities that are presumed, or otherwise believed to be foreign.
The foreign entity is responsible for determining which of the four IRS W-8 forms is appropriate for their business situation and the form should be signed by a person authorized to sign W-8 forms.

14. Foreign Entities Continued…
PROCEDURE
Is the payment for product or goods provided outside of the US or for services performed outside of the US?
If YES, no reporting or withholding is necessary. Collect the signed W-8 form and send with copy of invoice to Vendor Maintenance and if services are being paid then send PPSC to FA&A and a copy to Vendor Maintenance.
If NO, then withholding of taxes may be mandatory. Send the signed W-8 plus any additional documentation such as PPSC, Copy Visa, Copy of Passport to Vendor Maintenance.

15. W-8BEN
Used primarily by entities and individuals to claim foreign status or treaty benefits to establish that the
Payee is not a US entity.
Is there a US reporting TAX ID Number? If yes, then is part II completed claiming Treaty benefits? If so, then payment is tax exempt if income is covered by an article in the Treaty.
All fields in line 10 must be completed to claim exemption on royalty payments. If there is no Tax ID number, then payment is subject to 30% withholding.

16. W-8ECI
Used primarily by the payee or beneficial owner indicating that the income that is listed on the form is effectively connected with the conduct of a trade or business within the United States. (The foreign parent company/organization has a location inside the US from which product is sent or services performed and that location does not have a separate US Tax ID number.)
If there is a US tax reporting number, the payment is subject to 30% tax withholding unless there is a services income listed on line 9.
In that case, payment is exempt from withholding. If there is not a services income listed on line 9 then we are required to obtain from the entity a different type of W-8 form.
If there is no US tax reporting number, then payment is subject to 30% withholding.

17. W-8EXP
Used primarily by the following entities to claim exemption from tax withholding:
Foreign governments, foreign tax exempt organizations, foreign private foundations, government of a US possession, or foreign central bank of issue.
These entities must be claiming exemption under IRS Code 115(2) 501© 89s, (b). Otherwise they need to file a W-8BEN or W-ECI.
Payment for form, W-8EXP, is usually exempt from withholding

18. W-8IMY
Used primarily by an intermediary, a withholding foreign partnership, a withholding foreign trust or a flow through entity.
Copies of appropriate withholding certificates, documentary evidence, and withholding statements must be attached to the W-8IMY.
Payment for form, W-8IMY, is usually exempt from withholding.

19. Entities Flowchart

20. Paying STIPENDS for Students or Visiting Researchers
Students or visiting researchers who are to receive a living allowance only – not compensation for services – may be paid a stipend
Stipend recipients are not considered employees nor independent contractors – payment is through vendor process and is considered subsistence allowance
Stipends cannot be paid from E&G funds except in very rare circumstances in which prior approval has been granted

21. PAYING STIPENDS FOR Students or Visiting Researchers Cont…
Stipends will be subject to tax withholding unless tax treaty is claimed
Treaty is claimed with IRS form W-8BEN – valid through December 31 of 3rd succeeding calendar year
Treaty can only be claimed if NRA has a current SSN or ITIN

22. PAYING STIPENDS FOR Students or Visiting Researchers Cont…
Reference Materials
FIS policy
IRS publications 901 & 515 (for withholding agents/employers)
IRS publication 519 (for international visitors/taxpayers)

23. NRA Question and Answer