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Non-Resident Payment

Payments to Non-Resident Aliens for Services performed Inside the USA

The following outlines the required procedures when making payments to nonresident alien visitors for services performed for the College in the United States. Ideally, this process should be started at least 6 weeks prior to the visitor’s arrival on campus.

STEP 1-DETERMINE VISA STATUS – In order to pay a nonresident alien visitor for services performed, the individual must enter the United States in a visa status that allows the College to issue payment. Please contact the Office of Financial Services (either Gloria Gilley, Payroll Office or Ruben Rivera, Controller) at least 6 weeks before the visitor is to arrive from abroad or 3 weeks before their arrival on campus if they are already in the United States. Generally, nonresident alien visitors must enter the United States in a business class visa status in order to be permitted to provide services to the College. This includes a B-1 Visa or a VW-B Visa (if the visitor enters the United States under the Visa Waiver Program). The following information will need to be obtained.

  • Country of Citizenship
  • Country of tax residency, if different than country of citizenship
  • Date of entry or expected entry into the United States
  • Visa status used or expected to be used to enter the United States
  • Nature of services to be provided
  • Whether individual is currently in the United States and/or providing services to another institution

STEP 2-DETERMINE THE TYPE OF PAYMENT – A determination must be made under which of the following categories the nonresident alien visitor will be paid.

Expense Reimbursement Only – In general, travel and living expense reimbursements to nonresident alien independent contractors are not subject to taxation and reporting provided that the business purpose for the reimbursement is documented and proper receipts accompany the reimbursement request. The following information must be obtained.

  •  Visa status and copy of Form I-94
  •  Independent Contractor Memorandum Agreement, noting that only expense reimbursement will be made and identifying the foreign status of the individual
  • B Honoraria Eligibility Certification, if applicable
  •  Original receipts documenting the business purpose of the expense

Contract for Services (including honorarium) – The following information must be obtained for any payments to be made to nonresident aliens for services performed for Colby College in the United States.

  • Visa status and copy of Form I-94
  •  Social Security Number or ITIN, if any
  •   Independent Contractor Memorandum Agreement
  •  Foreign National Information Form
  •  Form W-8BEN, Certificate of Foreign Status
  •  Form 8233, Exemption From Withholding On Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, if applicable, See Step 3 below
  • B Honoraria Eligibility Certification, if applicable

STEP 3-ASSESS TAX TREATY IMPLICATIONS – If a nonresident alien visitor is from a country that has a tax treaty with the United States, they may be able to take advantage of certain treaty benefits. The following requirements must be met in order for tax treaty benefits to be granted:

  •   Individual must be a tax resident of a treaty country before entering the United States;
  •   Type of payment being made (such as honoraria) must be covered by treaty;
  •  Individual must have an existing Social Security Number or ITIN; and
  •  Individual must complete and sign a Form 8233

If these requirements are not met, payment for services will be subject to a 30% federal tax withholding.

B Honoraria Eligibility Certification

The American Competitiveness and Workforce Improvement Act of 1998 contains provision that allows certain visa holders who were formerly prohibited from receiving payments for services to be paid honoraria and associated incidental expenses. Holders of B-1 and WB visas may be paid for usual academic activity if the payment is offered by an institution of higher education or a governmental research organization, provided such activities do not exceed 9 days at a single institution. In addition, such visa holders cannot have accepted honoraria and/or incidental expenses from more than 5 such institutions or organizations in the previous 6 months. The College requires a B-1 or WB visa holder to complete the B Honoraria Eligibility Certification before any payment for services is made by the College.

Payments to Non-Resident Aliens for Services performed outside the USA

If a nonresident alien is contracted or employed to perform services outside the United States, they are not required to have a social security number or individual taxpayer identification number in order to receive payment. This type of payment is not reportable to the IRS.

In these situations, the following forms must be completed and submitted to Accounts Payable:

  •   Independent Contractor Memorandum Agreement.  $4999.00 and below  or $5000.00 and above.  Please state on the form that “All work associated with this contract was performed outside the United States”.
  •   Form W-8BEN, Certificate of Foreign Status. This form is to be completed and signed by the nonresident alien.