Payments to Nonresident Aliens: Honorarium/Guest Speaker/Students
- Please complete the Foreign National Non-Compensation Form & IRS Form W-8BEN
- Once completed please return to the Finance and Business Services Office
- The individual must complete the online process and submit the required forms and documents to the Finance and Business Services Office before payments can be made.
Payments cannot be made to an individual who has an H1-B visa from another sponsoring institution. It is imperative that you verify with the Global Engagement Office 610-436-3515 before inviting a guest speaker or making payment arrangements with Nonresident Aliens.
Tax Withholding Rates for Nonresident Aliens:
| Type of Income | Tax Rate |
|---|---|
| Scholarships/Fellowships (F, J, M and Q immigration statuses) |
14% |
| Scholarships/ Fellowships (All other immigration statuses) | 30% |
| Independent Personal Services | 30% |
| Royalties | 30% |
| Prize/Awards | 30% |
| Honorarium | 30% |
| Compensation as student/ trainee | Single, 1 allowance if wages; 30% for all other |
Visiting scholars who enter the U.S. on a B-1 Visa may not perform "employment" services in the U.S.. This includes consulting services paid as an independent contractor.
However, a B-1 Visitor may be paid an honorarium for usual academic activities. The following conditions must be met:
- The services must be conducted for the benefit of West Chester University
- The activities will not last longer than nine days
- The individual has not accepted such payments for expenses from more than five institutions or organizations in the last six months (the 9/5/6 B Honorarium Rule).
Students
Nonresident Alien students may receive payments in the form of compensation, scholarships or fellowship, and prize or award.
Any scholarship given to a nonresident alien student that pays for tuition and required fees is known as a qualified scholarship and is not taxable according to the IRC section 117 titled Qualified Scholarship Exclusion. A scholarship given in excess of tuition and required fees is taxed at a 14% rate. All scholarships that cover room and board are taxable to the student. This tax will be charged to the students account and will become part of your financial obligation to the University.
Any scholarship given to a nonresident alien that pays for room, board, travel, research, optional fees, or other expenses is known as a non-qualified scholarship. All non-qualified scholarships are taxed at a 14% rate.
If a nonresident alien were to come to the University on an immigration status that is not a F,J,M, or Q visa and receive a qualified scholarship in excess of tuition and fees or a non-qualified scholarship then this person would be taxed at a 30% rate.
Any prize or award that nonresident alien students were to receive would be taxed at a 30% rate.
Guest Speakers
All honorariums are taxable with the following exception: the speaker has a social security number or International Taxpayer Identification Number (ITIN) AND is from a country with a tax treaty. If the speaker is from a country with a tax treaty but does not have a social security number/ITIN, they can apply for an ITIN from the IRS. Please refer to the IRS website.
When filling out the Check Request, please clearly write your contact information (phone and email) as clear correspondence is essential for the successful payment of the honorarium. Also, please indicate if the speaker has a SS#/ITIN. If the speaker has no number, there are two routes we can take:
- 30% tax will be deducted from the honorarium payment
- The guest speakers can apply for an ITIN from the IRS (time consuming).
Foreign Source Income (Only for Nonresident Aliens)
Foreign source income refers to income earned by a Nonresident Alien, for services performed outside of the United States. Foreign Source is not subject to U.S. tax withholding and reporting for Nonresidents. The source of the compensation is determined by the location of the activity.
If you wish to pay a foreign national for services performed outside of the United States, the foreign national must complete the appropriate form below and submit to the tax office.
Certification of Foreign Source Income
Consultants
A foreign national receiving a consulting fee is subject to 30% U.S. tax withholding unless both of the following conditions exist:
- They are from a country with a tax treaty that exempts compensation for independent personal services and,
- They have a U.S. social security number (SSN) or an individual tax identification number (ITIN).
Foreign nationals doing consulting in the U.S. must have the appropriate visa. B-1 Visas or WB (Waivers for Business) are not appropriate visas for independent consultants.
As a member of the Pennsylvania State System of Higher Education, West Chester University along with all other PASSHE Universities do not recognize tax treaties.
Please call Josh Stewart, 610-436-1018 with any questions.