Kentucky Banner Users Group
Non-Resident Alien Taxation
Presented by: Doris Settle
Diane Carver
Western Kentucky University
February 3, 2012
Session Rules of Etiquette
• Please turn off your cell phone/pager
• If you must leave the session early, please do so as
discreetly as possible
• Please avoid side conversation during the session
Thank you for your cooperation!
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Introduction
• The purpose of this session is to show how Western
Kentucky University implemented Non-Resident Alien
taxation for our Accounts Payable vendors and our
students in Banner
• The benefits of this session:
— Banner can be used without modifying the forms
— Banner can store information from Windstar
— Both vendor and students can be taxed
— Someone else has already created the scripts you will
need
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Introduction
• How long has Western Kentucky University been on
Banner?
— Financial Aid – March 1999
— Admissions/Student/AR – October 2000
— Finance – July 2001
— Human Resources – January 2002
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Introduction
• WKU has approximately 2,100 full-time employees and
21,000 students
• We are currently on the following versions of Banner
— Financial Aid – Version 8.13
— Accounts Receivables – Version 8.3
— Student – Version 8.5
— Finance – Version 8.6
— Human Resources – Version 8.6
— General – Version 8.4
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Topics of Discussion
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Implementing NRA taxation in Accounts Payable
Implementing NRA taxation in Students
Auditing NRA Amounts and Paying IRS
Creating Files for Windstar
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Kentucky Banner Users Group
Implementing NRA taxation in
Accounts Payable
Implementing NRA taxation in Accounts Payable
• Set up tax liability accounts for federal and state
withholding on FTMACCT
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FTMACCT
Course ID 0662
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Implementing NRA taxation in Accounts Payable
• Set up rule codes on FTMRUCL for tax withholding on
— DDWI Federal Withholding
— CDWI Cancel Federal Withholding
— DTWI State Withholding
— CTWI Cancel State Withholding
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FTMRUCL DDWI
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FTMRUCL Posting Modifier
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FTMRUCL CDWI
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FTMRUCL Posting Modifier CDWI
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Implementing NRA taxation in Accounts Payable
• Update the posting modifier for account on the G010
process code on each of the rule codes with the liability
account previously set up on FTMRUCL
— Normally the modifier fund is not needed unless liabilities
are posted to a separate fund. In which case, the fund
should be equal to the liability fund.
— We use a separate fund for our liability account with our
NRA
• Update the posting modifier for account on the G020
process code if a separate fund is used for liabilities,
otherwise, no posting modifier is needed for G020
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Implementing NRA taxation in Accounts Payable
• Create or Update Vendor
— A contractor status form must be filled out by department
— Tax Compliance Office must approve form
— Tax Compliance will fill in Windstar ID, Income Code and
Withholding %
— Send form to Accounts Payable
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Implementing NRA taxation in Accounts Payable
• Create or Update the Vendor record on FTMVEND
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Implementing NRA taxation in Accounts Payable
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Implementing NRA taxation in Accounts Payable
• Create or Update the Vendor record on FTMVEND
— Enter the Tax ID number (Windstar Tax ID),
— Enter the Income Type
• RY = 12 Income Code (00-Exemption Code)
• RX = 12 Income Code (04-Exemption Code)
• RE = 15 Income Code (00-Exemption Code & L-Income
Code Subtype)
• RZ = 15 Income Code (04-Exemption Code & L-Income
Code Subtype)
• NC = 16 Income Code (00-Exemption Code)
• NX = 16 Income Code (04-Exemption Code)
• FB = 20 Income Code (00-Exemption Code)
• FX = 20 Income Code (04-Exemption Code)
• PR = 50 Income Code (00-Exemption Code)
• PX = 50 Income Code (04-Exemption Code)
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Implementing NRA taxation in Accounts Payable
• Create or Update the Vendor record on FTMVEND
— Enter a percentage to withhold for either or both federal
and state
• 00 - Must be entered for NRA Vendors even if 0
• 14 - for 14%
• 30 - for 30%
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Implementing NRA taxation in Accounts Payable
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Implementing NRA taxation in Accounts Payable
• Requester enters a Payment Authorization Form On-line
— This is a smart form
• Once a requester enters id the name & address will fill
in
• Commodity Codes have a drop down list
• The Vendor is checked for his citizenship status
—If status is NRA an approval line is added for Tax
Office
—A Tax Compliant section is added to end of form
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Implementing NRA taxation in Accounts Payable
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Implementing NRA taxation in Accounts Payable
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Implementing NRA taxation in Accounts Payable
• Tax Compliance Office Receives Form
— If Form is correct will sign on Approval line
— Fills in Windstar Tax ID, Income Type and Withholding %
— Sends Form to Accounts Payable
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Implementing NRA taxation in Accounts Payable
• Accounts Payable enters invoice on FAAINVE
— If Payment Authorization is for an NRA vendor
• Check FTMVEND set up
— Invoice will have 1099 indicator and income code set
— Change income code if different
— Complete invoice like normal
• Tax amount will not show on the form
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Implementing NRA taxation in Accounts Payable
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Implementing NRA taxation in Accounts Payable
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Implementing NRA taxation in Accounts Payable
• Start Check Process
— Run FARINVS-Invoice Selection Report
— Tax amount will be subtracted from Invoice Amount for
Check Amount
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Implementing NRA taxation in Accounts Payable
• Start Check Process
— Run checks like normal
— We use Evisions Intellecheck process to print our checks
• The stub will show the NRA tax amount under the
Additional Charges column
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Implementing NRA taxation in Accounts Payable
• Finish Check Process
— Run FABCHKR (Batch Check Register)
• The report will show the NRA tax amount under the
ADDL CHG/TAX column
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Implementing NRA taxation in Accounts Payable
• Finish Check Process
— Run FABCHKA (Batch Check Accounting Process)
• The taxes will go into the Liability Fund 110011 and
Liability Account 23105
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Implementing NRA taxation in Accounts Payable
• Remove from 1099 table
— A script is run nightly to remove the NRAs from the 1099
table (The script checks the federal withholding % on the
vendor to see if is not null)
• wkus_fin_NRA_del_FAB1099.sql
— If you have existing reports that look at the Tax ID field for
1099 vendors, check to make sure the Federal Withholding
field is null
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Kentucky Banner Users Group
Implementing NRA taxation in
Students
Implementing NRA taxation in Students
• Assessment of NRAs is made in Windstar
• A file is exported out of Windstar (containing id, name,
and tax information)
• Transfer file to Banner environment (FTP, etc.)
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Implementing NRA taxation in Students
• Runs a Crystal Report with a stored procedure
— Wkup_tax_intrfac_edit_student
• Update/insert fields into ROBUSDF table
• Update/insert citizenship code on SPBPERS table
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Implementing NRA taxation in Students
• Update/Insert fields in ROAUSDF
— Four fields in ROAUSDF (Applicant User Defined Data)
have been set up for Windstar data
• Foreign Withholding Rate Fall
—Current Year NRA %
• Foreign Withholding Rate Spring
—Next Year NRA %
• Foreign Withholding Exemp Code Fall
—Current Year NRA exemption code
• Foreign Withholding Exemp Code Spring
—Next Year NRA exemption code
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Implementing NRA taxation in Students
• Set up Detail Code Category in TTVDCAT
— We used NRA
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Implementing NRA taxation in Students
• Set up Detail Code in TSADETC (Detail Code Control
Form)
— Type = C for Charge
— Category = NRA
— Check Refundable
— Check Like Term and Active
— Pay Type = N for Miscellaneous Charges
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Implementing NRA taxation in Students
• Set up General Ledger Interface to Banner Finance in
TSADETC
— Account A will contain the normal Fund and Account
— Account B will contain the Fund 110011 and Account
23105 the G/L Liability account for withholding taxes
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Implementing NRA taxation in Students
• Financial Aid will enter funds and amounts
— Scholarships, Institutional Awards, etc… on RPAAWRD
(Award Maintenance)
• Funds will disburse to Accounts Receivables
— To avoid creating taxes in current year for disbursed funds
for Spring, I created a script to change disbursement date
for NRA students to new year
• Wkus_fam_nra_upd_rpradsb_date
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Implementing NRA taxation in Students
• When Financial Aid emails their award letters a
statement is added to the letter for NRA students
regarding the tax.
— “All non-US Citizens who enter the US under a temporary
VISA are subject to taxation at a rate of 14% or 30% on any
scholarship funds received that do not pay for tuition and
fees.”
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Implementing NRA taxation in Students
• Students will register for classes, housing and meal
plans on-line
• Charges will appear on their account
— TSAAREV (Account Detail Review Form-Student)
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Implementing NRA taxation in Students
• Two scripts will run nightly to calculate NRA tax
— Wkus_bar_tbraccd_tax_add-This job will add a tax charge
(QNWH) to the foreign student if their citizenship code =
NR or N and Financial Aid has fed over the following types
of funds: Athletic, Scholarships, Federal and State funds
— Wkus_bar_tbraccd_tax_credit-This job will credit a tax
charge to the foreign student if citizenship changes from
the NR or N
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Implementing NRA taxation in Students
• Excess fee for Betsy Ross = $1200.00
• Multiply the Foreign Withholding Rate % of 14 from
ROAUSDF field 62 (Since we are in the spring semester)
• Her tax amount will be $168.00
• TSAAREV will now show a detail code of QNWH for
$168.00
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Kentucky Banner Users Group
Auditing NRA Amounts and Paying IRS
Auditing NRA Amounts and Paying IRS
• Accounts Receivables Report
• WKU uses Infoview Crystal Reports to produce our
reports
— NRA Scholarship Students with Excess of Tuition/Fees
Report (Audit Report)
• Enter the term
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Auditing NRA Amounts and Paying IRS
• Accounts Payable Report
— Non-Resident Aliens A/P Vendor Amounts for Year Report
(This report is used to determine the amount to send to the
IRS for A/P)
• Enter the tax year parameter
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Auditing NRA Amounts and Paying IRS
• Accounts Receivables Report
— Foreign Withholding Rate (This report is used to determine
the amount to send to the IRS from A/R)
• Enter the begin date
• Enter the end date
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Auditing NRA Amounts and Paying IRS
• Paying IRS
— Each deposit uses the IRS Electronic Federal Tax Payment
System (EFTPS)
— Student withholding taxes will be paid at the end of any
quarter-monthly period
— Accounts Payable will be deposited according to the IRS
rules
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Kentucky Banner Users Group
Creating Files for Windstar
Creating Files for Windstar
• Windstar Technologies has a Standard ID Definition and
1042S-Payment Information Layouts for importing files
into Windstar
— 2 scripts create the import files for Accounts Payable and
Student
— A person may have multiple records depending on their
income code, exemption code and withholding rate
— As long as those fields stay the same the amounts are
summarized
— The files are created in January for the preceding tax year
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Creating Files for Windstar
• Accounts Payable
— Wkup_nra_ap_windstar_dat
• Creates the log file “import_nra_ap_yyyy.txt”
• File is placed in a directory for Windstar import
• Student
— Wkup_stu_foreign_1042S_dat
• Creates the log file “import_1042s_yyyy.txt
• File is placed in a directory for Windstar import
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Creating Files for Windstar
• Cut 1042-S forms out of Windstar not Banner
— We print the forms in late January
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Summary
• NRA withholding tax can be accomplished using Banner
forms and a few scripts
• For this to work correctly many departments must be
involved: Tax Compliance, Accounts Payables, Financial
Aid, Accounts Receivables and IT
• Now something that was very manual has become
automated
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Questions & Answers
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Thank You!
Doris Settle
[email protected]
Diane Carver
[email protected]
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Download

Non-Resident Alien Reporting - Eastern Kentucky University