International Employees

International Employees

 

Definitions

Agencies:

  • Internal Revenue Service (IRS) The U.S. agency that is responsible for the collection of income taxes.
  • Social Security Administration (SSA) The U.S. agency that is responsible for social service programs such as Medicare and Social Security, paid for by payroll taxes.
  • USCIS The acronym for United States Citizenship and Immigration Services, a branch of the United States Department of Homeland Security. It is the agency that establishes the documentation standards that allow employees to work in the United States.

IRS Terminology

  • Nonresident Alien Any foreign national who is neither a citizen nor a lawful permanent resident of the United States.
  • Resident Alien A lawful permanent resident of the United States that has been issued a Permanent Resident Card (Form I-551 or "green card") by USCIS or has a stamp in the passport indicating temporary evidence of resident status.
  • Substantial PresenceTest A foreign national, who has met the substantial presence test and has been "substantially" present in the U.S. the required amount of time, is considered resident for tax purposes. Section 3 of the UO-NRA form is used to determine an employee's ability to meet the substantial presence test. Additional details on IRS website.
     

Documents

  • I-94 (Admission/Departure record):
  • DS-2019 or Certificate of Eligibility for Exchange Visitor (J-1) Status is the basic document used in the administration of the exchange visitor program and is issued by the Office of International Affairs.
  • J-1 Letter This is a work authorization letter for those on J-1 visas issued by the Office of International Affairs in certain situations.
  • Employment Authorization Card (EAD) or I-688 B, known popularly as a "work Permit" is a document issued by the USCIS that provides its holder a legal right to work in the U.S. It should not be confused with the "green card" which is issued to permanent residents.
  • Social Security Card (and number) In the United States, a Social Security number (SSN) is a nine-digit number issued to U.S. citizens, permanent residents, and temporary (working) residents. Its primary purpose is to track individuals for taxation purposes. All individuals who are working in the U.S. must make application for a Social Security Card.

Getting Started

As a new employee, this section of the Business Office website assists international employees in completing the following forms payroll forms related to taxation and authorization to work:

  • W-4 (for state and federal tax withholding from earnings)
  • UO-NRA (for annual recording of citizenship, visa and years of presence in the U.S.)
  • 8233 and attachment letter (additional form required to claim tax treaty exemption from U.S. taxes)
  • I-9 Work Authorization Form and Supporting Documents (to show identity and eligibility to work)

Some of the same supporting documents must be submitted with both the I-9 and UO-NRA forms: I-94, I-20, DS-2019, Employment Authorization Document, and J-1 Letter.

Visit to Social Security Administration

One of the first things you will need to do before completing your hiring paperwork is to apply for a Social Security number.

Important: You will need to wait 10-days after your arrival in the U.S. before applying. Social Security needs to be able to check with the SEVIS database before processing your application. Registration for SEVIS is done in International Affairs.

  • All new employees must submit a legible copy of their social security card (or a receipt) with the hire paperwork to ensure that Payroll Office records match the Social Security Administration files for reporting purposes.
  • All new employees that have not yet received a social security card must complete Part B of this form Form SSA-7028Instructions.
  • Many foreign nationals cards bear special annotations that restrict their use (see discussion below in I-9 section).

Taxation Overview & Tax Treaty Chart

International employees are generally subject to U.S. income tax on their U.S. source income and must complete the W-4 form which determines how much tax will be withheld from wages.

Tax Treaty Exemption:

A number of foreign countries have income tax treaties with the United States, which can often reduce or eliminate U.S. tax on income earned. Check to see if you are from a tax treaty country:

Tax Treaty Chart

At the time of hire, you will be asked to complete a UO-NRA form, which allows the Payroll Office to help determine your U.S. tax withholding status by reviewing your current Visa status, current citizenship/residency status, and for substantial presence test determination.

Note: If you are from a tax treaty country and are requesting a tax treaty exemption, you will need to submit Form 8233 and attachment letter with the UO-NRA form. See Section 6 below for detailed instructions.

Instructions: W-4

Completing this Internal Revenue Service (IRS) form is a requirement for every new employee. The W-4 form determines how much tax will be withheld from each paycheck. A yearly renewal of the W-4 is not required unless a change in law makes it mandatory.

W-4 Form (Blank International Version of Form)

Instructions for Completing the W-4

On line 3 of the W-4, you must select the "Single" status, or the box entitled, "Married, but withhold at higher Single rate."

On line 5, you have the option of claiming "0" or "1" allowance. If you claim "0", more tax will be withheld from your paycheck.

Exceptions to line 5 restrictions:

- Residents of Canada, Mexico, and South Korea may claim more than one allowance.

- Students from India may claim an allowance for an accompanying spouse and dependent children who are U.S. citizens or residents.

- Nationals of American Samoa and the Northern Mariana Islands may also claim allowances for dependents.

On line 6, above the dotted line, write in NRA (for Nonresident) to denote your international status. (This will need to be done if you are not using the international version of the W-4 Form.)

On line 7, you may not claim exempt status. However, you may qualify to claim exemption from U.S. taxes based on a tax treaty. Please refer to the tax treaty in Section 8 above for completion of appropriate forms.

See Section 9, Additional References, below for detailed IRS instructions.

Instructions:UO-NRA & 8233 / Attachment Letters

UO-NRA (Foreign National DataRequest Form)

The UO-NRA form helps the Payroll Office to determine correct tax-related payroll deductions for international employees, and must be completed at the following times:

  • Before beginning employment
  • If visa status changes
  • At the beginning of each calendar year (Annual Renewal Period)

UO-NRA Forms:

Required Attachments for UO-NRA Form:

Each UO-NRA must be accompanied by copies of the employees current I-94 card (admission/departure record) and either a DS-2019 Form (and a J-1 Letter, if appropriate) or Employment Authorization Card.

  • I-94 (Admission/Departure record):
  • DS-2019 or Certificate of Eligibility for Exchange Visitor (J-1) Status is the basic document used in the administration of the exchange visitor program and is issued by the Office of International Affairs.
  • J-1 Letter A work authorization letter for those on J-1 visas is issued by the Office of International Affairs in certain situations. See Chart for details on when the J-1 letter is required.
  • Employment Authorization Card (EAD) or I-688 B, known popularly as a "work permit" is a document issued by the USCIS that provides its holder a legal right to work in the U.S. It should not be confused with the "green card" which is issued to permanent residents.

Form 8233 and Attachment Letter (Optional)

The 8233 form, issued by the Internal Revenue Service (IRS), allows international employees to claim a tax treaty exemption. The 8233 will override the W-4 form, and must be completed annually.

Only complete this additional form (requesting a tax treaty tax exemption) if you are a permanent resident from a country that has a tax treaty with the U.S. and if you wish to claim the tax treaty exemption.

Each 8233 Form must be accompanied by the appropriate 8233 Attachment letter and both forms are submitted with the UO-NRA to the UO Payroll Office.

First, check to see if you are from a tax treaty country. Tax Treaty Chart

Links to 8233 blank form, completed form and attachment letters:

Attachment Letters are organized by Purpose and Permanent Residency)

  • Purpose: Teacher / Researcher or Student
  • Residency: For example, a citizen of China, who is a permanent residence of France, would claim a tax treaty exemption based on the French tax treaty with the United States. The individual would not claim a tax treaty exemption because they are a Chinese national.

Instructions: I-9 Form

Form I-9 Employment Eligibility Verification (blank form, list of acceptable documents, instructions for Section 1)

Instructions for I-9 (for Section 2)

This is an important USCIS form that all employees must complete to show identity and eligibility to work in the United States. You will need to refer to the Lists of Acceptable Documents and provide one document (or combination of documents) from List A or one document from List B and List C.

LIST A OR LIST B and LIST C

Section 1 of the I-9 Form must be completed by the employee on the first day of work. The employee will need to record either the I-94 admission number or alien registration number. The employee may also need to record their passport number and country of issuance (See #4 of Form I-9 instructions for further details.

Section 2 of the I-9 Form must be completed by the employer within 3 business days of the date work began. Make sure you record the documents in the correct columns, i.e, A or and C.

Social Security Card The SSN card may have one of two annotations that restrict their use.

ocial Security Card reads: Is it acceptable for USCIS Form I-9 List C?
Valid for work only with DHS (or INS) authorizations No
Not valid for employment No

Examples of completed I-9 Forms:

List A Documents (F-1 Student)

List B & C Documents (TN Status)

Note: The examples shown above do not represent all documents available for completing the I-9 form.

Annual Renewal Process

Each year, international employees are sent an email asking that that they complete important forms related to income tax withholding and possible tax exemption in the coming year. This year, the forms are due in the Payroll Office by January 8, 2015. See Annual Renewal Process for complete details.

Additional References

Additional tax information is available on the IRS website and in the following IRS Publications:

Publication 519 U.S. Tax Guide for Aliens

Publication 513 Tax Information for Visitors to the U.S.

IRS Notice 1392 Supplemental Form W-4 Instructions for Nonresident Aliens