NRA Payments nonresident aliens

1
NRA Payments(non-resident aliens)

• How to correctly pay income to foreign
  individuals

2
VISA types

• H-1 (long term sponsor needed)
• J-1 (max. 3 year stay sponsor needed)
• F-1 (max. 5 years students)
• B-1 (temporary for business)
• B-2 (temporary for pleasure or medical)
• B-1/2 (temporary for business pleasure)
• VWB (Visa Waiver for business)
• 24 countries have agreements with U.S.
• Maximum 90 day card
• VWT (Visa Waiver as a tourist)
• Canadian entering without inspection
• Only passport need to enter U.S.

3
Honorarium payment to NRAs

• College and Universities frequently make
  honorarium payments to foreign nationals for
  academic activities NOT involving employment.
• The IRS defines an honorarium as a payment of
  money to a person for participation in a usual
  academic activity for which NO fee is required.

4
Who is eligible to receive an honorarium payment?

• Any VISA type.
• Activity must NOT last longer than 9 days at any
  single higher education institution.
• Activity is conducted for the benefit of the
  institution.
• Visitor has not accepted an honorarium from 5
  other institutions during the past 6 months.

5
Eligibility cont.

• If the activity DOES NOT meet these guidelines,
  the visitor MUST have a J-1 or H-1 VISA
• All VISA types can be reimbursed for travel
  expenses.
• Length of stay and work eligibility in the U.S.
  is monitored by the I-94 form (arrival /
  departure record). Every NRA is required to keep
  these documents in their passport.

6
Other taxable items

• The IRS does consider free services given to
  NRAs as taxable income. CCs NRA tax
  specialist needs to be aware of these types of
  transactions.
• Room and Board
• Tuition
• Books
• Personal supplies / travel allowance

7
Documents needed for Honorarium payments

• Recipient must complete a 8233 or
• W8-Ben
• The institution must complete the withholding
  agent certification portion of the 8233 or W8-Ben
  and attach any tax treaty statements.

8
Overseas honorarium payments

• The IRS allows institutions to contract with
  individuals in foreign countries and pay them for
  services they provide. These services are not
  considered taxable U.S. income as long as none of
  the services are performed on U.S. soil.
• NO 8233 or W8-Ben is required

9
How can I help?

• All employees need to take an active roll in
  documenting payments made to NRAs.
• All payments should be pre-approved by CCs NRA
  tax specialist to insure compliance with state
  and federal tax laws.
• CCs tax specialist will determine if all
  appropriate paperwork has been completed.