Paying International Visitors for Performing Services
This page describes the procedures for complying with the federal income tax withholding and reporting requirements for payments made through accounts payable to nonresident aliens for the performance of services. For federal tax purposes, individuals are generally taxed as nonresident aliens if they do not fall into any of the following categories:
- United States Citizen
- United States Resident with a Green Card
- Individual without a Green Card who meets the Substantial Presence Test. The “Substantial Presence Test” is a complicated calculation that is generally satisfied if the individual was present in the U.S. for a combination of 183 days during the current and previous 2 years.
- Note – Students present in the U.S. on an F,J, M or Q visa (for up to five years) and teachers here on a J or Q visa (for up to two years) are generally exempt from the substantial presence test and are nonresident aliens.
If you are inviting an international visitor to campus and wish to pay him/her, you must follow the procedures outlined below.
Complete W-8BEN
Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding. All nonresident aliens, including individuals who have a social security number, who are paid for services through Accounts Payable, must complete Parts I & III of Form W-8BEN, unless the individual is claiming treaty benefits on Form 8233 as explained below. The completed form must be submitted to the Controller’s Office.
- Do not use Form W-8BEN to claim treaty benefits for compensation earned as an independent contractor.
VERIFY VISA STATUS: Visa types
In most circumstances, Amherst is only able to make payment to a short-term international visitor if he/she enters on a J-1, B-1, B-2, or WB (waived business) visa status.
- B-1, B-2, (WB): Payment can be made to a visitor in this status only if the following criteria are met: Honoraria may be paid if the services performed last no more than 9 days, the service is of direct benefit to Amherst, and the visitor has not accepted more than 5 such payments from other institutions during the previous 6 months. If these criteria are not met, only travel can be reimbursed.
- J-1: See additional requirements below if Amherst is not the visa sponsor.
In limited circumstances, payment may be requested for visitors on other visa types as described below:
- F-1 (Student) - Not Sponsored by Amherst: Must receive written permission from sponsor in advance of any payment.
- J-1 - Not Sponsored by Amherst: Must receive written permission from sponsor in advance of any payment.
- H-1 - Not Sponsored by Amherst: Payment to sponsoring institution only. Payment to the individual not permitted.
- O-1 (Outstanding) - Not Sponsored by Amherst: Payment to sponsoring institution only unless additional engagements are included in the visa petition.
Complete Foreign National Information Form (FNIF)
To assist the Controller’s Office in determining whether an international visitor should be properly classified as a nonresident alien:
- A Foreign National Information Form must be completed by each international visitor who will be paid for the performance of services. This includes international speakers and lecturers who will be paid an honorarium.
- The form should be signed and dated by the international visitor and submitted to the Controller’s Office with the appropriate attachments prior to requesting payment.
- This form does not need to be completed by international visitors who will only receive a reimbursement of travel and living expenses.
SUBMIT A REQUEST FOR PAYMENT OF SERVICES FORM
- Submit a Request for Payment of Services Form in duplicate to Accounts Payable (Box 2221).
- For new vendors, follow the instructions for setting up a new vendor.
- Original invoices from the vendor may be submitted in place of the Form if it contains all of the necessary information.
- Staple original receipts to the Form for reimbursement of business expenses.
- Paper clip any material required to be included with the check to the request.
Special Note: If the service provider is receiving greater than $5,000 and is included in an event that exceeds $10,000, the payment may be subject to the Massachusetts Performer’s Tax. Please refer to the Massachusetts Tax Withholding on Payments to Performers page for more information.
To Determine Federal Income Tax Withholding
The tax rate on payments made to nonresident independent contractors is generally 30%. However, the federal tax may be reduced or eliminated if the person is eligible to claim treaty benefits as explained below.
- Treaty Benefits - Individuals who are residents of certain countries may claim tax treaty benefits which exempt all or a portion of payments received for independent personal services from federal income tax withholding. An individual may claim these benefits by completing Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual. The completed form must be submitted to the Controller’s Office, prior to payment, for filing with the Internal Revenue Service. For specific treaty articles, please refer to IRS Publication 901 - U.S. Tax Treaties or you may contact Laurie Bouchard in the Controller’s Office at 542-8494 or by e-mail at lmbouchard@amherst.edu.
- Individual Taxpayer Identification Number (ITIN) - In order to claim treaty benefits, an individual must have a valid social security number or ITIN. An ITIN issued by the IRS to international individuals who are ineligible to obtain a social security number. To apply for an ITIN, an individual must complete Form W-7, Application for IRS Individual Taxpayer Identification Number. Either the original or copies, certified by the issuing agency or notarized by a U.S. Notary Public, of certain identifying documents (generally a passport) must accompany the application. To apply in person at a Taxpayer Assistance Center, please see http://www.irs.gov/uac/Contact-Your-Local-IRS-Office-1 for a list of locations.
- It can take as long as 30 days for the IRS to issue an ITIN. It will be the department’s responsibility for obtaining the ITIN from the applicant. If the Controller’s Office does not receive the ITIN once it is issued, the federal tax withholding liability must be satisfied through other College sources, generally the department making the payment.
Federal Tax Reporting
All non-employee compensation paid to nonresident aliens are reportable to them and to the IRS on a Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding at the end of the calendar year.
Travel and Living Expenses
For Services Provided - Reimbursements of travel and living expenses paid to nonresident aliens who are providing services to Amherst, with the proper substantiation are not subject to federal income tax reporting or withholding. Accounts payable will reimburse these expenses as long as it is verified that the visa holder is authorized to receive expense reimbursements. A copy of the individual's visa and passport must be attached to the request.
No Services are Provided - Subsistence and travel grant payments are generally classified as a tax reportable fellowship when no services are provided. Please refer to Policy for Granting a Fellowship Award to an International Person.