FOREIGN NATIONAL TAX WORKSHOP INTERMEDIATE

1
FOREIGN NATIONALTAX WORKSHOPINTERMEDIATE

• PRESENTED BY
• The Office of Human Resources
• MAY 4, 2007

2
TODAYS AGENDA_________

• Calculating Substantial Presence
• Entering VISA and PYFMU screens
• Advanced Look at Tax Treaties
• Tax Overrides and Exceptions
• Getting Updated Information
• Overview of the Annual Renewal Process

3
SUBSTANTIAL PRESENCEResident vs. Nonresident
Alien___

• TWO TESTS to determine if a non-U.S. citizen
  should be treated as a U.S. resident for tax
  purposes Residency Status
• Green Card Test Resident Alien
• Substantial Presence Test (SPT)
• If they PASS the test Resident Alien
• If they do NOT PASS Nonresident Alien

4
SUBSTANTIAL PRESENCEResident vs. Nonresident
Alien___

• SPT is based on
• VISA STATUS
• AND
• NUMBER OF DAYS in the U.S.
• Magic number is 183
• Cant count exempt days
• SPT is calculated on the UW1123 form
• Residency Status can change from year to year

5
UW1123 Alien Tax Information Request___

• Needs to be resubmitted when an individual
• Changes visa status (for example F-1 to H-1)
• Begins Optional Practical Training (OPT) or
  Curricular Practical Training (CPT) Students
• Applies for Permanent Residency
• (Continued)

6
UW1123 Alien Tax Information Request___

• Needs to be resubmitted when an individual
• Leaves the U.S. for more than 183 days
• Is working outside the country resubmit form
  each time they leave and return.

7
SUBSTANTIAL PRESENCEResident vs. Nonresident
Alien___

• What happens when an individual becomes a
  Resident Alien (is substantially present)?
• Eligible to be taxed like a U.S. citizen. Look
  at completing a new W-4.
• Pay Social Security Medicare tax, if not
  eligible for the student exemption.
• If still eligible for tax treaty benefits, will
  need to complete different tax treaty forms
• Complete the 1040 tax return same as a U.S.
  citizen

8
UW1123 - Student with Tax Treaty
9
PYFMU SCREEN Student with Tax Treaty
International Tax Forms Information
Program PYFMP01 Next SSN /Person ID
_________ Name ANY BODY
Country P.R.CHINA Person
ID
VISA F-1 SSN - -
Standard Exclusion YTD Gross
YTD Codes 15
18 19


Rev Form Form Name
Type of Date Date
Entry Date Stmnt 1123 ALIEN TAX INFORMATION
1st US Entry 08 12 2005 05 04 2007
1078 BENEFIT OF US RESIDENCE
Effective __ __ ____ 1001 REDUCED RATE
CERTIFICATE Expiration __ __ ____

__ __ ____
8233 EXEMPTION FROM WITHHOLDING Expiration
12 31 2007 Y

__ __ ____
_ Tax Override (According to W4) _
(Y/N/R/A) __ __ ____
_ Substantial Presence Date 01 01
2010 Exception
Found Enter-PF1---PF2---PF3---PF4---PF5---PF6---
PF7---PF8---PF9---PF10--PF11--PF12---
DELE
PYFM2 EXIT
10
UW1123 - Break in U.S. Presence
11
PYFMU SCREEN Break in U.S. Presence
International Tax Forms Information
Program PYFMP01 Next SSN /Person ID
_________ Name ANY BODY
Country KOREA Person
ID
VISA F1 SSN - -
Standard Exclusion YTD Gross
YTD Codes 15
18 19


Rev Form Form Name
Type of Date Date
Entry Date Stmnt 1123 ALIEN TAX INFORMATION
1st US Entry 07 19 2006 05 04 2007
1078 BENEFIT OF US RESIDENCE
Effective __ __ ____ 1001 REDUCED RATE
CERTIFICATE Expiration __ __ ____

__ __ ____
8233 EXEMPTION FROM WITHHOLDING Expiration
12 31 2007 Y

__ __ ____
_ Tax Override (According to W4) _
(Y/N/R/A) __ __ ____
_ Substantial Presence Date 01 01
2010 User Modified Exception
Found Enter-PF1---PF2---PF3---PF4---PF5---PF6---
PF7---PF8---PF9---PF10--PF11--PF12---
DELE
PYFM2 EXIT
12
UW1123 - 1st Entry as a Tourist
13
PYFMU SCREEN 1st Entry as a Tourist
International Tax Forms Information
Program PYFMP01 Next SSN /Person ID
_________ Name ANY BODY
Country KOREA Person ID

VISA F1 SSN - -
Standard Exclusion YTD Gross
YTD Codes 15 18
19

Rev
Form Form Name
Type of Date Date Entry Date
Stmnt 1123 ALIEN TAX INFORMATION
1st US Entry 01 03 2004 05 04 2007 1078
BENEFIT OF US RESIDENCE Effective
__ __ ____ 1001 REDUCED RATE CERTIFICATE
Expiration __ __ ____

__ __ ____ 8233
EXEMPTION FROM WITHHOLDING Expiration 12 31
2007 Y

__ __ ____
_ Tax Override (According to W4) _ (Y/N/R/A)
__ __ ____
_ Substantial Presence Date 01 01 2009
Exception Found
Enter-PF1---PF2---PF3---PF4---PF5---PF6---PF7---PF
8---PF9---PF10--PF11--PF12---
DELE
PYFM2 EXIT
14
UW1123 - Need to Enter 1078 Date
15
PYFMU SCREEN Need to Enter 1078 Date
International Tax Forms Information
Program PYFMP01 Next SSN /Person ID
_________ Name ANY BODY
Country HONG KONG Person ID

VISA H1 SSN - -
Standard Exclusion YTD Gross
YTD Codes 15 18
19


Rev Form Form Name
Type of Date Date Entry Date
Stmnt 1123 ALIEN TAX INFORMATION
1st US Entry 01 07 2007 01 05 2007 1078
BENEFIT OF US RESIDENCE Effective
01 01 2007 01 05 2007 1001 REDUCED RATE
CERTIFICATE Expiration __ __ ____

__ __ ____
8233 EXEMPTION FROM WITHHOLDING Expiration
__ __ ____ _

__ __ ____
_ Tax Override (According to W4) _
(Y/N/R/A) __ __ ____
_ Substantial Presence Date 01 01
2007 User Modified Exception
Found Enter-PF1---PF2---PF3---PF4---PF5---PF6---
PF7---PF8---PF9---PF10--PF11--PF12---
DELE
PYFM2 EXIT
16
UW1123 - Student on OPT
17
PYFMU SCREEN Student on OPT
International Tax Forms Information
Program PYFMP01 Next SSN /Person ID
_________ Name ANY BODY
Country P.R. CHINA Person
ID
VISA F1 SSN - -
Standard Exclusion YTD
Gross YTD Codes 15
18 19


Rev Form Form Name
Type of Date Date
Entry Date Stmnt 1123 ALIEN TAX
INFORMATION 1st US Entry 08 24 2001
01 05 2007 1078 BENEFIT OF US RESIDENCE
Effective __ __ ____ 1001
REDUCED RATE CERTIFICATE Expiration __
__ ____

__ __ ____ 8233 EXEMPTION FROM WITHHOLDING
Expiration 12 31 2099 01 05 2007 _

__ __ ____
_ Tax Override (According to W4) _
(Y/N/R/A) __ __ ____
_ Substantial Presence Date 01
01 2006
Exception Found Y Enter-PF1---PF2---PF3---PF4-
--PF5---PF6---PF7---PF8---PF9---PF10--PF11--PF12--
-
DELE PYFM2
EXIT
18
PYFM2 SCREEN Student on OPT
No Record Found on APPTPRSN Table
International Tax - Exception Income Code
Program PYFMP02 Next SSN /Person ID
_________ Name ANY BODY
Country P.R. CHINA Person ID
SSN Override Income
Title Appointment Code
Description Code ID
Entry Date End Date 19
X01nn
00624721 01 05 2007 __ __ ____
__ _____
________
__ __ ____ __
_____ ________
__ __ ____ __
_____ ________
__ __ ____ __
_____
________ __
__ ____ __
_____ ________
__ __ ____ __
_____ ________
__ __ ____
Enter-PF1---PF2---PF3---PF4---PF5---PF6---PF7---P
F8---PF9---PF10--PF11--PF12---
DELE
PYFM1 EXIT
19
TAX TREATIES____________

• Apply only to Federal State taxes do NOT
  include Social Security Medicare
• Treaties vary according to an individuals
• Country of permanent (tax) residence
• Visa status (purpose) Note For primary visa
  holder only (not for F2, J2, etc.)
• Most treaties have time and/or compensation
  maximums
• Need to complete forms to take advantage of the
  treaty benefits (in tax packet or on web
• Several treaties have special provisions

20
Maximum Presence in the U.S. is counted in
actual months from your date of arrival when
"months" are indicated in this column. Where
"years" are indicated, Maximum Presence is
counted as the number of tax (calendar) years you
are present in the U.S. p.a. per annum
(Retro) means that this country's treaty
has a "retroactive clause". When a treaty
contains this clause and the individual remains
in the U.S. for a period of time longer than that
allowed by the treaty, the entire tax exemption
will be lost retroactively to the beginning of
the individual's visit to the U.S. May
claim exemption for dependents living in the U.S.
Exemptions must be prorated based on the rate of
the aliens U.S. source of income to world-wide
income (IRS Pub 519).
21
JAPAN Treaty benefits are NOT available to
anyone who entered the USA on 1/1/05 or later, if
entry was from 3/31/04 thru 12/31/04 then treaty
is only available for 2005. If entry was prior to
3/31/04 treaty benefits are available under the
old Japan treaty. _at_ JAPAN You must be a
permanent resident with a permanent domicile in
Japan or who have resided continuously in Japan
for more than five years. Permanent residents are
taxed on their worldwide income and continue to
be subject to Japanese tax while they are
temporarily away. Prospective Loss Clause
If your DS-2019 or I-797 document indicates that
your status is valid for more than 24 months,
then you are not entitled to the tax treaty
benefits. Once-In-A-Lifetime Clause Tax
treaty benefits may only be used once in a
lifetime.
22
PYFMU SCREEN SPECIAL TAX OVERRIDE CODES FOR
NONRESIDENT ALIENS ONLY
5/31/06
23
PHIQ SCREEN WHEN TREATY MAXIMUM IS MET

• PHIQ EMPLOYEE
  DEDUCTION LIST PAGE 1
  B-2
• ANY BODY PERSON
  ID XXXXXX SS XXX-XX-XXXX
• FEB REG UNCLASS CALC ID 0703100
  CHANGE ID CURRENT
• 
  
  REASON
• DEDUCTION
  COMP AMT NOT TAKEN
  AMOUNT
• 01 A20 FEDERAL TAX
  414.29
  13.10
• 02 A25 FED EXCL-TREATY -1042S
  786.11
  0.00
• 03 B20 WISCONSIN TAX
  414.29
  1.90
• 04 B25 WIS EXCL-TREATY -1042S
  786.11
  0.00
• 05 4ER HUMANA EASTERN GRAD
  
  13.50
• 06 476 DEF TUITION MILW
  
  120.45
• 07 622 MILW GRAD ASSIST ASSOC
  1213.90
  22.45
• 
  PAGE TOTAL TAKEN
  171.40

24
Annual Renewal Processing_

• PURPOSE
• To identify foreign nationals who
• Need to update tax treaty forms
• 8233 and Revenue Procedure Statement (Rev. Proc.
  87-8 or 87-9)
• Will become substantially present
• Need to receive a residency change notice
• If eligible for treaty benefits, now need to
  complete a W-9 form

25
Annual Renewal Processing_

• PROCESS
• UWSC runs queries at the end of October
• for all UW Institutions
• to identify foreign nationals needing updates
• UWSC sends the following to UW Institutions via
  email in late November
• Electronic spreadsheets listing those needing
  notification by type of notice needed and sorted
  by Institution
• Sample template transmittal letters for each list
• UWSC sends pre-printed 8233 and W-9 forms by U.S.
  mail

26
Annual Renewal Processing_

• ACTION NEEDED
• Follow the instructions emailed from UWSC,
  including
• Sending out the notices/forms
• Entering forms into the system, when returned,
  according to timeline provided

27
(No Transcript)
28
(No Transcript)
29
PLEASE ENTER SSN OR PERSON-ID PYFMU
SCREEN______________
International Tax Forms Information
Program PYFMP01 Next SSN /Person ID
_________ Name
Country Person ID
VISA SSN
- - Standard
Exclusion YTD Gross YTD
Codes 15 18
19

Rev Form
Form Name
Type of Date Date Entry Date Stmnt
1123 ALIEN TAX INFORMATION 1st US
Entry __ __ ____ 1078 BENEFIT OF US
RESIDENCE Effective __ __ ____
1001 REDUCED RATE CERTIFICATE
Expiration __ __ ____

__ __ ____ 8233 EXEMPTION
FROM WITHHOLDING Expiration __ __ ____
_

__ __ ____ _ Tax
Override (According to W4) _ (Y/N/R/A)
__ __ ____ _
Substantial Presence Date __ __ ____
Exception Found
Enter-PF1---PF2---PF3---PF4---PF5---PF6---PF7---PF
8---PF9---PF10--PF11--PF12---
DELE
PYFM2 EXIT
30
PYFM2 SCREEN

• International Tax -
  Exception Income Code
  Program PYFMP02
• Next SSN /Person ID _________
• Name ANY BODY
  Country KOREA, REPUBLIC OF
• Person ID
  VISA F1
• SSN
• Override
• Income
  Title Appointment
• Code Description
  Code ID Entry Date
  End Date
• __
  _____ ________
  __ __ ____
• __
  _____ ________
  __ __ ____
• __
  _____ ________
  __ __ ____
• __
  _____ ________
  __ __ ____
• __
  _____ ________
  __ __ ____
• __
  _____ ________
  __ __ ____
• __
  _____ ________
  __ __ ____

31
VISA SCREEN
NAME ANY BODY
PERSON ID 00123456 BIRTH
XX/XX/XXXX DO NOT RELEASE ELIGIBILITY _
CERT DATE __ __ ____ I-9 DEPT _______ FIELD
____ VISA INFORMATION CONTACT _________
TYPE BEGIN DATE END DATE PURPOSE COUNTRY
WORK AUTH EXP DATE __ __ __ ____
__ __ ____ _ ___
_ __ __ ____
TAX STATUS FED M 04 STATE M 04
TAX TREATY TAX RULES FED STATE


SOC SEC APPT ID BEGIN DATE
END DATE TITLE MAJOR
DEPT 01057360 01 08 2006
100 21105 A022070
(PAY BEN SYS
COORD) 00463260 04 28 1997 01 07 2006
100 08400 A036000
(UNIV BENEFIT SPEC)
NEXT ________________________________________
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