The reporting and withholding rules for payments to Non Resident Aliens (NRAs) differ significantly from those payments made to US Citizens or Resident Aliens.

What are the withholding requirements that apply to nonresidents?

A nonresident can not claim “EXEMPT” on their W-4.  They must claim “single” regardless of actual marital status. Only one allowance is permitted unless they are a resident of Canada, Mexico, Japan or South Korea.

Are some NRAs exempt from federal withholding tax?

Some F-1 and J-1 visa holders are eligible for exemptions from federal withholding tax because of a tax treaty between the U.S. and their country of residence. They must complete IRS form 8233 accompanied by a written statement. Copies of the Social Security card, passport, I-20 and/or IAP66 must also be attached. This form is provided by the Tax Compliance office (CSC 3rd Floor). FIU will only allow exemption from withholding 10 days after the IRS receives form 8233. 

Are all visa holders exempt from Social Security and Medicare Tax?

With certain exceptions, international students and scholars who are temporarily present in the U.S. on F-1, J-1, M-1 and Q-1 visas are usually exempt from withholding of Social Security and Medicare taxes.  This exemption does not apply to spouses and children on F-2, J-2, M-2 and Q-2 visas, nor does this exemption apply to nonresidents who have changed to any immigration status other than F-1,J-1, M-1 or Q-1.

How will the withholding tax be reported?

FIU will report wages paid to a nonresident which are exempt under a tax treaty on forms 1042 and 1042-S. Any additional wages over and above the exempt amount are reported on form W-2. These forms will be sent to the current home address. Addresses must be updated using Employee Self Service or in the Payroll Office (PC 220).

Links: Tax Compliance office

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