Handbook for Payments to International Visitors
This handbook is designed to aid departments in the processing of payments to individuals who are not citizens of the United States. The handbook is a joint effort of the Office of Accounting, Office of Payroll Services, and the Office of International Services and is revised annually in conjunction with the annual Payments to International Visitors Workshop held in late January or early February.
The processing of payments to foreign individuals is different than to U.S. citizens. This is due to Immigration and Naturalization Service (INS) regulations regarding the eligibility for payment and the Internal Revenue Service (IRS) with respect to taxation and reporting of payments.
The Immigration section of the handbook addresses INS eligibility requirements for payment. The remainder of the Handbook is devoted to IRS issues.
Non-U.S. citizens are classified by the IRS into two categories based on the individual’s U.S. tax residency status: 1) resident alien and 2) nonresident alien. Payment to a “resident alien” is treated like a payment to any other U.S. citizen for tax withholding and reporting purposes. However payment to a “nonresident alien” is treated differently depending upon the type of payment being made: 1) Employee (dependent personal services), 2) Independent contractor (independent personal services), and 3) Fellowship (stipend) and scholarship recipients (see the flow chart which follows this introduction).
We hope this handbook proves to be a useful tool in the foreign visitor payment process. We would appreciate any feedback or comments that you may have as you use the handbook in everyday, live situations.
Office of Accounting
Office of International Services
Office of Payroll Services
May 1, 2005