IRS vs. USCIS
State of CT website
available on the IRS web site include:
U.S. Tax Guide
Tax Information for Visitors to the
U.S. Tax Treaties
International Students, Teachers, Researchers and
ALL Foreign Students,
Teachers, Researchers and Visitors to the Wesleyan campus are required to
provide information on their status and make an appointment with Finance
or Payroll to determine their
U.S. tax status and to complete required forms necessary to authorize payments,
such as payroll, scholarship/fellowship, honoraria or travel reimbursements.
This information may be
advance of arrival to campus using the
Upon submission, the form will be electronically submitted to
Failure to provide the
requested information may result in withholding of additional taxes, delay in
payment of wages and compensation, or rejection of payment requests.
1. IRS vs.
The IRS, Internal Revenue Service, is responsible for
enforcing tax laws and regulations in the United States. The USCIS,
U.S. Citizenship and Immigration Services, is responsible for regulating
permanent and temporary immigration to the United States. This includes
legal permanent residence status, nonimmigrant status (e.g., tourists or
students), and naturalization.
Status in the United States
There are four classifications of taxpayers: 1)
U.S. Citizens; 2) Permanent Residents; 3) Resident Aliens for tax purposes;
and 4) Non resident Aliens for tax purposes. Individual status is determined once the necessary
information is provided to Financial Services or Payroll and analyzed.
Alien vs. Non Resident Alien Tax Status
Every individual receiving compensation from U.S. sources
is subject to income tax rules and regulations of the United States. There
are two classifications of foreign taxpayers, Resident Aliens and Non
resident Aliens. A Resident Alien is subject to U.S. income tax from all
sources of income inside and outside of the United States and cannot claim
benefits of a tax treaty (if applicable). Resident Aliens can take
advantage of the same types of deductions allowed for U.S. Citizens and
are entitled to personal deductions for themselves and their families. Non
resident Aliens are subject to U.S. tax on U.S. sourced income only and
are able to claim benefits of tax treaties.
4. Residency Determination
A resident for tax purposes is a person who is not a U.S.
Citizen and meets the "Green Card" test or the
"Substantial Presence Test".
Card" or "Lawful Permanent Resident" Test - An individual
is a lawful permanent resident of the United States if given the
privilege, according to the immigration laws, of residing
permanently in the U.S. as an immigrant. This is often referred to
as receiving a "Green Card" or "Permanent Resident Card". The "Green
Card" is issued by the USCIS.
Presence Test - A non-exempt (see exception rule) foreign
individual will meet the "Substantial Presence Test" if he
or she is physically present in the United States:
greater than 31 days during the current (calendar) year, AND
183 days during the 3-year period that includes
the current year and the 2 years immediately before that.
All the days present during the current
calendar year, plus
1/3 of the days present in the first prior
year before the current year, plus
1/6 of the days present in the second prior
year before the current year.
Exception Rule: The days counted toward the
"Substantial Presence Test" are disregarded for commuters from
Canada and Mexico, medical emergencies, diplomats, employees of
international corporations and participants in charitable sporting
In addition, and important to most visitors to Colleges and
Universities, the exception applies to Students, Teachers and
Researchers present in the US on an F, J, M or Q visa.
5. Dual status (for Tax
An individual can be considered a Non resident and
Resident Alien within the same tax year. The individual can choose to be
treated as a U.S. resident for the entire year if:
He/She was a Non resident Alien at the beginning of
He/She was a Resident Alien, Permanent Resident at the
end of the year, and
His/Her spouse was a U.S. Resident or Permanent
Resident a the end of the year.
Careful consideration must be made to determine residency
status. Whether the individual is a Resident or Non resident Alien
determines the necessary withholding percentages, reporting requirements,
and whether or not a payment can be issued to an individual.
6. Tax Treaties
Non resident Aliens may be entitled to reduced tax rates or exemptions
from tax under a tax treaty between the United States and the individual's
country of residence. The U.S. has treaties with approximately 60
countries in the world. Each treaty is different and must be reviewed on
a case by case basis. Each treaty has provisions for Students, Teachers,
Athletes, Performers, etc. Some treaties have provisions which limit length of
stay and amount earned. Wesleyan utilizes software which analyzes an
individual's status and situation to take advantage of any tax treaty benefits that
are available. Wesleyan also reserves the right to deny tax
treaty benefits based on the information provided on a "Foreign
National Information Form".
The following forms and/or procedures may be used to
claim exemption or reduction of federal income tax. All
exemption forms require a US federal tax identification number (SSN or
8233 Exemption From Withholding on
Compensation for Independent (and Certain Dependent) Personal Services
of a Nonresident Alien Individual - This exemption may be used
by an individual to claim a treaty benefit. The 8233 must include
the individual's SSN or ITIN.
W-8BEN Certificate of Foreign Status of
Beneficial Owner for United States Tax Withholding - This exemption
may be used by a corporation that does not have a permanent
establishment in the US. If the corporation has a dependent agent
that contracts regularly for work in the US, it would have a permanent
establishment in the US. Form W-8BEN parts I and II must be
completed to claim a treaty exemption. The foreign corporation
must have an EIN and submit a Form 1120F tax return with the treaty
W-8ECI Exemption From Withholding of Tax on
Income Effectively Connected With the Conduct of a Trade or Business in
the US - This exemption may be used for a corporation that is
engaged in a US trade or business. Income that is effectively
connected with a US trade or business is often connected with the fact
that the foreign corporation has a "fixed base" or "permanent
establishment" in the US. That is, it has some sort of permanent
office, factory, base of operations, etc. in the US from which it
generates income. A payment to a foreign corporation with ECI is
treated the same as a payment made to a US corporation. That is,
the payment would not be subject to withholding and the income would be
reported on a 1099. An ECI foreign corporation would normally file
an 1120F income tax return annually. A personal holding company
cannot claim a treaty benefit using W-8ECI.
Central Withholding Agent - Foreign
athletes and entertainers who are making a tour of the US may wish to
enter into a Central Withholding Agreement (CWA) with the IRS for
reduced withholding, provided certain requirements are met. Under
no circumstances will such a withholding agreement reduce taxes withheld
to less than the anticipated amount of income tax liability. A CWA
is an agreement entered into by the NRA athlete or entertainer, a
designated withholding agent, and an authorized representative of the
IRS. A request for a CWA should be submitted to the IRS 45 days
before the agreement is to take effect. For information on
applying for a CWA see
Note that the State of Connecticut does not recognize U.S. Tax
Treaties, therefore state tax is applicable to earnings based on earnings
in excess of income thresholds.
Tax (Social Security and Medicare tax)
Regardless of citizenship, Social Security and Medicare
taxes apply to the payment of wages for services performed as an employee
in the United States. However, Social Security and Medicare taxes do not
apply to payments made to foreign visitors on F, J, M or Q visa status
if the services performed are in accordance with the purpose for which they
were admitted to the U.S. and the individual is considered to be a
Nonresident Alien for tax purposes. Also, students may claim an exemption
from FICA taxes based on student status.
8. Filing an Income Tax Return
foreign individuals are required to file a U.S. income tax return, even if they are
only visiting. See IRS Publication 513, Tax Information for Visitors to
the United States, and Publication 519, U.S. Tax Guide for Aliens, for
What to File - A
Nonresident Alien must file a form 1040NR (U.S.Nonresident Alien
Income Tax Return) or 1040NREZ (U.S.Nonresident Alien Income Tax
Return for Certain Nonresident Aliens with no dependents)
Filing Dates - If
Nonresident Alien had earned income during a tax year, the deadline
for filing is April 15th of the following year. If no U.S. income was earned
during a tax year, a Nonresident Alien in F, J, M or Q status is
required to file an 8843 Form by June 15th of the following year.
How to file - Wesleyan provides access to tax filing
software, CINTAX, for use
by all Nonresident Alien visitors. This software is a group use
license and accessible through the internet from the end of February
through the end of June for the previous tax year.
All eligible individuals will be contacted when this software is
available. If you do not receive an e-mail, contact Payroll at
All Foreign Visitors are
responsible for determining their correct taxable status, ensuring that
they have sufficient tax withheld, filing their tax return correctly and
on time, and reporting any changes in their tax or immigration status
while at Wesleyan.
A scholarship, fellowship or stipend, which requires
an individual to perform
any type of personal service as a condition of receiving it, is fully
taxable. Those not requiring personal service as a condition of receipt
are also taxable for the portion that is not "qualified". The amount withheld depends on several factors,
such as whether the student is a candidate for a degree, the nature of the
payments, and tax treaty provisions.
A "qualified scholarship" is not subject to tax
or tax withholding. A qualified scholarship
is any amount that is used for the following:
Tuition and fees required for enrollment and
attendance at your institution.
Fees, books, supplies and equipment required for
courses and instruction.
Each student is responsible for maintaining the proper
records for tuition, fees, books, supplies and other necessary expenses in
order to justify these amounts as deductible from their taxable gross
income. The taxable portion includes amounts used for living expenses,
such as room and board, stipends and other expenses not required for
completion of a degree.