Payments for Independent Personal Services (Honoraria)
- NON-RESIDENT ALIENS
Provisions regarding payments made through the vendor system to non-employee aliens for independent personal services, such as honoraria, consulting fees, and performance fees, are paid on a UC Form 5 "Check Request" (non-payroll), and are subject to the following requirements:
- Must obtain proper visa classification for payment. (Copy of the visa or passport may be attached to the UC Form 5.)
- Must have a Social Security Number (SSN) or Individual Tax Identification Number (ITIN). ITIN is only available to non-employees who cannot obtain a Social Security Number.
- Residency Status will be determined by completing Certificate of Foreign Status for Federal Tax Withholding (UC W-8BEN)
- Foreign visitors who hold a B-1, B-2, WB, and WT visa, must complete UC Form "Certification of Academic Activity." Under the Act, an academic activity may not exceed nine days at a single institution, and the visitor cannot accept honoraria from more than five such institutions or organizations in the previous six-month period.
- Except for 5a or 5b below, all payments are subject to 30% federal tax withholding after subtracting the value of one personal exemption ($3,650 for 2010) if the alien gives us a properly completed Form 8233.
- If the foreign visitor is from a tax treaty country and meets the requirements of the applicable treaty, no federal tax withholding is required. The exemption from withholding becomes effective for payments made at least 10 days after IRS Form 8233 has been mailed to the IRS Office of Compliance.
- If the tax treaty benefit is not available and you're a resident of Canada, Mexico, or the Republic of (South) Korea; a student from India; or a U.S. national; you may be able to claim additional personal exemptions for your spouse and children. See Pub. 519 for more information.
- To claim the tax treaty or additional personal exemptions, the visitor must complete IRS Form 8233, Exemption from Withholding on Compensation for Independent Personal Services of a Non-Resident Individual.
- All original forms must be forwarded to the Accounts Payable Office for review and processing. Payments are reported by the Accounting Office to the IRS on Form 1042-S.
- Where to find additional information:
IRS publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporations.
IRS publications 519, U.S. Tax Guide for Aliens.
- RESIDENT ALIENS
Payments to resident aliens for independent personal services (honoraria) are not subject to tax withholding, but are reported by the Accounting Office to the IRS on Form 1099-MISC, U.S. Information Return. For policy and procedures, go to:
