The following information is to be used by departments hiring foreign nationals that are also non-resident aliens for staff, faculty or student employee positions on UNCW campus.
All foreign nationals that are also non-resident aliens and are employed by UNCW must have a Social Security number and a visa status that allows them to work in the US. They must also meet with the Payroll Manager personally to complete the necessary tax forms and paperwork that will allow them to continue to work on campus. NRA's are taxed based on the tax treaty the US has with their country of residence. If taxes are not withheld accurately, UNCW can be held liable for both the employee's taxes and the university's taxes and any penalties and interest.
When meeting with the Payroll Manager, the NRAs must bring their visa, passport, Social Security Card (or letter from the Social Security Administration with the number), I-94, DS-2019 or I-20, letter from hiring department with salary and position, local address, phone number and email, foreign address and completed Direct Deposit form with a voided check or letter from the bank listing the correct bank routing number and the employee's account number.
Below are definitions of terms that you may also find helpful:
Calendar Year: For US tax purposes, a person is considered to be in the US for a "calendar year" if he/she is present during one or more days between the period from January 1 - December 31. For example, if an individual is present in the U.S. from December 15-31, he/she is present in the U.S. for one calendar year, even though he/she is here for only 17 days.
Visa: A stamp on a page in the passport of a nonresident. The visa allows the passport bearer permission to apply for entry into the US under the conditions specified by the visa type, which the bearer holds. A visa can be obtained by making a personal appearance before the consular officer assigned to the applicant's consular district. Examples of information contained on the visa stamp are visa number, visa type, issue date, expiration date, and location of the issuing office.
Visa Type: “Visa type” refers to the category of visa that a nonresident holds. The "visa type" is marked on the visa stamp or sticker in the individual’s passport. For more information regarding the various types of visas or appropriate type of visa needed for a particular individual, contact the Office of International Programs.
Form I-94: The Arrival/Departure Record. This document controls the terms of stay, or status in the United States. The INS keeps the arrival portion and the departure portion (small white card) is stapled to the passport. It shows the visa classification, date of entry, and length of stay authorized.
Nonresident Alien for Tax Purposes: An individual who is not a US citizen, does not hold an Alien Registration Card or Permanent Resident Card (commonly called a "green card") and has not met or passed the substantial presence test. A nonresident alien is taxed only on his/her income from US sources using special tax withholding, reporting and filing guidelines
Original Date of Entry to the U.S.: An individual may enter or leave the U.S. several times during the period of his/her US visit (for vacation, holidays, etc.) The original date of entry in the US is the first date that he or she arrived in the U.S. before beginning his/her study, teaching, research, etc.
Permanent Resident Alien: An individual who has been granted the legal privilege of living and working in the United States indefinitely. A permanent resident alien (i.e, green card holder) is taxed on his worldwide income and in the same manner as a US citizen.
Resident Alien for Tax Purposes: An individual who has met or “passed” the substantial presence test by the number of days physically present in the US or has been granted lawful permanent residence in the United States as a permanent resident alien. Resident aliens are taxed on their worldwide income and in the same manner as US citizens.
Substantial Presence Test: A test used to determine an individual’s US residency status for tax purposes. It involves a calculation of the number of days that an individual is physically present in the US over a period of three calendar years taking into consideration i) all of the days physically present in the US during the current calendar year, (ii) one-third of all of the days physically present in the US during the first preceding calendar year, and (iii) one-sixth of all the days physically present in the US during the second preceding calendar year. The results of the calculation determine whether the individual will be treated as a resident alien or a nonresident alien for tax purposes. If the result of the substantial presence test equals 183 days or more, the individual will be treated as a resident alien for tax purposes; if the result of the substantial presence test is less than 183 days, the individual will be treated as a nonresident alien for tax purposes.
Tax Treaty: The Treasury and State Department negotiate tax treaties between the United States and foreign countries. Both the President and the Senate must approve a treaty. One main purpose of a treaty is to prevent international double taxation. International double taxation occurs when more than one country taxes the same income. Income tax treaties prevent double taxation by allowing a particular type of income to be taxed by either of the countries involved in the treaty.
Not all countries have a tax treaty with the United States. If a nonresident alien, who is a non employee visitor from a country without a tax treaty, is eligible to receive a payment from the university, the payment is subject to withholding at a rate of 30%. A nonresident alien who is an employee from a country without a tax treaty is subject to the employee graduated tax withholding tables. The tax withholding is calculated based on an employee's Form W-4 and Form NC-4.
Each treaty the United States negotiates with a country is unique unto itself. Therefore, a general statement cannot be made that a specific type of income is exempt for all nonresident aliens on campus. If a nonresident alien is eligible to receive income from the university, his/her country of residence must first be determined. Then a review of the tax treaty for that country can be made to determine if the type of income in question is exempt. If the income is exempt from withholding due to a tax treaty, the nonresident alien must complete a Form 8233 to apply for the exemption from withholding.
US Residency Status For Tax Purposes: US Tax is applied to income based upon an individual's US residency status for tax purposes. This status is not associated with the individual's immigration or visa status. A non-US citizen’s residency status is either a resident alien or nonresident alien. A resident alien is taxed on worldwide income in the same manner as a US citizen; a nonresident alien is taxed only on income from US sources.