A non-resident alien is any person living or working in the United States , who is not a US citizen or Permanent Resident Alien (Green Card).
All recipients (US citizens, resident aliens, non-resident aliens) of non-employee compensation must provide a statement on their Citizenship/Residency Status.
The objective of this procedure is to determine the proper withholding of taxes for payments to non-resident aliens.
Non-resident aliens are subject to tax on U.S. source income. Residents of certain foreign countries having tax treaties with the United States may be entitled to reduced rates of, or exemptions from, tax under the applicable tax treaty.
In contrast to non-employee compensation to US citizens and permanent resident aliens, reported on Form-1099, The University Corporation as the withholding agent, is required and liable to determine and withhold all applicable taxes on all payments to non-resident aliens. If the withholding agent fails to withhold the required taxes, and the non-resident alien fails to pay the tax due, the withholding agent is liable for the tax, plus interest and penalties.
Examples of non-employee compensation are:
- Student/participant stipends
- Teacher stipends
- Compensation to independent contractors
- Compensation to lecturers
Please note that the reimbursement of expenses (e.g. travel expenses) is not considered compensation, therefore a Citizenship/Residency Statements does not need to be filed with reimbursement paperwork.
Form of Citizenship/Residency Statements
In some cases the Citizenship/Residency Statement is incorporated in the required form (Minor Contracted Services, Lecturer and Independent Contractor Agreement). In other cases (stipends via Check Request) the submission of 'Citizenship/Residency Statement' form is required.
Non-Resident Aliens who will receive non-employee compensation must contact The University Corporation at 818-677-4695. They will be provided an ID and password and be directed to a web-based questionnaire (Glacier), which will determine their correct tax withholding. Please note that this process is required for all payments to non-resident aliens, regardless of the amount.
All non-resident alien recipients of non-employee compensation should contact The University Corporation 30 days prior to the actual work being performed.