Requirements for Payments to Foreign Nationals, Nonresident Aliens (NRAs)

Directive Statement

This directive establishes the proper methods of making employment, independent contractor/honorarium, and fellowship payments to foreign nationals and nonresident aliens (NRA).

Reason for Directive

Payments made to foreign nationals or nonresident aliens (NRAs) are subject to withholding tax requirements on their U.S. source income.  Therefore, all payments to foreign nationals or NRAs must be approved by Payroll Services by completing the Foreign National Tax Information Form before Payroll or Disbursements can issue any payment.

Who must comply?

All departments processing a payment to a foreign national or nonresident alien.

Procedures

Steps for hiring a foreign national, including using the Foreign National Information System (FNIS), are outlined in the Employment Hub. Other, non-employee type payments may use the procedures outlined below.  

1. The department and foreign national or nonresident alien (NRA) will complete the Foreign National Tax Information Form
2. All payments to individuals require the following documentation to be attached:
   • • Copy of Visa and Passport page showing passport number
     • Copy of I-94 AND Travel History
     • Form DS-2019 (J-1)
     • Verification against the Specially Designated Nationals and Blocked Persons(SDN)
   • Copy of Social Security Card or Individual Taxpayer Identification Number (ITIN)
3. In addition, depending on the type of individual payment, the following additional documentation is needed:
   • • For Employment Payments:
       Copy of I-20 (F-1), I-797 (H-1B), or Form I-766 (EAD Card)
       Copy of I-9, Employment Eligibility Verification, submitted to HR
     • For Independent Contractor/Honorarium Payments:
       Copy of Invitation Letter – must show dates of lecture and dollar amount offered
     • For Fellowship Payments:
       Copy of I-20 (F-1) , I-797 (H-1B)
       Copy of Memorandum of Understanding
4. Payments to a Foreign Corporation performing services in the U.S. require the following documentation:
   • Form W8-BEN-E and mark box 10 for zero percent withholding
   • The foreign corporation must have a U.S. Employer Identification Number (EIN) to receive tax treaty benefits
     If they do not have a U.S. EIN: Complete Form SS-4 to obtain one.  Note: If the university does not receive a U.S. EIN it is required by law to withhold 30% tax on the payment
5. Send the completed form and all required documentation to Payroll Services, PO Box 113201
6. Payroll Services will enter the information into International Tax Navigator, the tracking system to determine residency for tax purposes
7. International Tax Navigator will generate the following:
   • • International Tax Navigator will generate IRS Forms (such as W-4, W-9 for employees…)
     • IRS Forms (such as W-4, W-9 for employees considered substantial for tax purposes based on the substantial presence test, Treaty Analysis Log and a Tax Treaty if applicable)
8. Payroll Services will send these documents to the department
9. The department has the foreign national or nonresident alien sign the IRS Forms received from Payroll Services
10. If applicable, the hiring department should enter the foreign national’s Electronic Personnel Action form (ePAF) after the IRS Forms have been signed. Supporting documents should be uploaded to the hire ePAF. 

Last Reviewed

04/30/2022: reviewed content

Resources

U.S. Tax Treaties Website

Specially Designated Nationals and Blocked Persons List (SDN)

Form I-20 Information

 I-9, Employment Eligibility Verification, Information

I-94 FAQs

DS-2019 Information

Toolkits

Employment Hub – Foreign Nationals

Contacts

Payroll Services: 392-1231

Disbursement Services: 392-1241

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