Payments to Nonresident Aliens
Accounts Payable & Travel
Independent Personal Service Payments to Nonresident Aliens
Required Documentation and Withholding
Types of Payments
There are two types of payments to non‐employee, non-resident aliens:
1. Honoraria- UC Honoraria Policy (Accounting Manual D-371-35)
2. Travel Expense Reimbursement – Travel Regulations (BFB-G-28)
Federal and California State Applicable Tax Laws
Federal (IRS) Tax Laws
IRS Publication 901 – U.S. Tax Treaties provides direction when making these payments and when it is allowable to
exclude these payments from Federal income tax withholding. If the US does not have a tax treaty with the payee’s
country of tax residence, or if the US does not have a tax treaty but the individual does not provide both the ITIN
(or SSN) and a Form 8233 (Exemption from Withholding on Compensation for Independent (and certain dependent)
Personal Services of a Nonresident Alien Individual), then UCSF Accounts Payable must withhold 30% from the
payment and remit it to the IRS.
List of Countries with Tax Treaties
See the IRS website for a list of U.S. Income Tax Treaties.
Note: if a country is listed but has no treaty article cited, contact the AP Travel & Operations Manager for
instructions.
California (CA) State Withholding Tax Laws
The UC Accounting Manual provides direction on making honorarium payments to residents of foreign countries
who perform services in California or who receive income from California sources are subject to State income tax
withholding. Non-California residents are subject to State income tax withholding of 7% of gross if the total
payments exceed $1,500 during the calendar year.
Example:
04/01/2013
08/15/2013
First honorarium payment
Second honorarium payment
Total 2013 payments to date
7% withholding on $1,600
Net payment
10/01/2013
Third honorarium payment
7% withholding on $600
Net payment
$500
$1,100
$1,600
$112
$988
$600
$42
$558
Payment Options
If withholding is required based on the information above, departments have the option of “grossing up” the payment
so that the tax is expensed to the University and the individual will receive the original amount.
Example
• A $250.00 honoraria payment would be grossed up to $357.14 if total calendar year payments are less
than $1,500. Federal withholding of 30% is required.
• A $250.00 honoraria payment would be grossed up to $376.14 if total calendar year payments have
exceeded $1,500 requiring 30% Federal and 7% State withholding.
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Payments to Nonresident Aliens
Accounts Payable & Travel
Procedure
Departments should submit honoraria payment requests using the BearBuy Payment Request Form with the required
attachments shown in the table below.
Honoraria
Requirements
Travel Expense Reimbursement
● Visa type B1, B2, WB or WT
Contact AP Operations & Travel Manager if another type
of visa is presented
●
Usual academic activity not exceeding 9 days in duration
● Reasonable travel and/or incidental
expenses incurred in connection with
University activity
●
Expenses comply with G28 Travel
Regulations
● Individual has not received honoraria from more than 5
educational institutions in the past 6 months
Country with
Tax Treaty
● Doc-A, Doc-B, Doc-C, and
Doc-D
● No withholding
● Withholding for State may
be required in some
situations
Country without
Tax Treaty
Exceptions
●
●
●
Doc-A and Doc-B
only
Withhold 30%
Federal
Withholding for
State may be
required in some
situations
● Doc-A and Doc-B
● No withholding
● Doc-A, Doc-B, and Doc-C (if available)
● Doc-A and Doc-B
● Withhold 30% Federal
● No withholding
● Withholding for State may be required in some
situations
● All exceptions must be approved by the Accounts Payable Director, Accounts Payable Manager, or
Payroll Manager
Document Types:
Doc-A: Proof of Visa Status or I-94 (Arrive-Departure document completed by Customs Agent when entering the US;
visa type is usually noted on this document)
Doc-B: Certificate of Academic Activity
Doc-C: Social Security Number (SSN) or Individual Taxpayer ID Number (ITIN) or Application for IRS Individual Taxpayer
Identification Number (W7) and W7 Instructions
Doc-D: IRS Form 8233 (Exemption from withholding) and Form 8233 Instructions if tax treaty is invoked
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Payments to Nonresident Aliens
Accounts Payable & Travel
Frequently Asked Questions (FAQs)
What documentation does the payee receive showing the amount withheld?
The payee (non-employee, nonresident alien) will receive a Form 1042-S (similar to a Form 1099 for US residents) from
Disbursement Accounting postmarked by March 15 of the following year.
What should the payee do if he/she wishes to pursue a refund from the IRS?
After the payee has received the Form 1042‐S, it is up to the payee to complete a federal income tax return (1040NR).
In most cases, the payee will need to file for an ITIN before submitting a federal tax return. The refund will be based on
the individual’s tax situation, total income, deductions, withheld tax, etc.
What if the payee claims he/she does not have a visa because it was not required?
Review the I‐94, Arrive‐Department Customs Card to see if a visa type was noted. Generally the U.S. Customs Agent will
note the visa type on the I‐94 card. If not, contact the AP Travel & Operation Manager.
Questions?
Contact the Controller’s Office Solution Center at 415‐476‐2126
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