International Visitors Tax Procedures
Departments hosting short-term international guest visitors, such as musicians, artists or lecturers, must adhere to the procedures outlined below to ensure proper reporting and tax withholding in compliance with federal, state and local laws.
Section 431 of the American Competitiveness and Workforce Improvement Act governs payments made to non-resident international individuals who are visitors at educational institutions based on the purpose of the visit and the type of payment made to the non-resident.
Reimbursement for travel expenses
For international guest visitors who receive reimbursement for their expenses only (travel expenses, per diem) in compliance with university travel policy, the payment does not require to be reported or to have tax withheld. Since reporting is not required, a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) is not needed from the guest visitor. The guest must have a B1/B2 visa to enter the U.S.
To request reimbursement:
- Complete a purchase requisition and travel voucher and attach original receipts
- Attach a brief explanation regarding the reimbursement and the benefit of the visit to the university
- Attach copies of the visa and accompanying I-94 document to the purchase requisition
Honoria payments (non-employee compensation)
Please note that IRS rules are less complex for travel reimbursements than honoraria. In order to issue an honoraria payment to a short term international guest/visitor, the following conditions must be met by the visitor:
- The contractual obligation at Northern Kentucky University cannot exceed 9 days.
- The guest visitor cannot receive similar payments from more than 5 institutions during the preceding 6 months.
- The guest visitor must have a Social Security number or Individual Taxpayer Identification Number (ITIN) to receive an honoraria payment. An ITIN is easier to obtain by either visiting a U.S. Embassy in the visitor's home country or by submitting documents to the IRS. Refer to the IRS website for instructions.This needs to be done 6-8 weeks in advance of visit to campus.
- The guest visitor must have entered the U.S. on a B1/B2 Visa.
- The letter of invitation must include the following questions and statements requiring a written response from the guest visitor:
* When was the last time you visited an educational institution in the United States?
* Have you visited an educational institution in the United States more than five (5) times in the last six (6) months?
* If you currently have a U.S. Social Security Number or Individual Tax Identification Number, please provide a copy of the
card. Without an SSN or ITIN, the visitor cannot take advantage of the tax treaty agreements in IRS Publication 515 that
may be applicable to their country and will have 30% federal tax withheld from honoraria payments.
- Contact Procurement Services to determine if a Personal Service Contract is required. Honoraria payment may not exceed $1,000, including expenses. Payments in excess of $1,000 require a contract and approval by the Director of Purchasing.
A payment for honoraria has different tax implications. The honoraria payment is typically subject to 30% tax withholding unless there is an income tax treaty exemption between the U.S. and the guest visitors home country enabling the payment to be made without withholding 30% in tax. Refer to IRS Publication 515 for valid tax treaties.
In order to qualify for the tax exemption, the guest visitor will need to have a U.S. Social Security number or ITIN. The guest visitor must be made aware at the time of the invitation to visit Northern Kentucky University. Refer to the IRS website to obtain an ITIN.
After obtaining the SSN or ITIN, complete IRS form 8233 -- Exemption from Withholding for Non-resident Alien Individuals -- and file it with the Payroll Office along with copies of his visa and I-94 prior to payment being issued.
The hosting department bears primary responsibility for ensuring payment made is in compliance to the above guidelines. Any fines, penalties and interest incurred from noncompliance will the responsibility of the hosting department.