When an employee is hired, and will be receiving compensation from the university, they are required to complete the Federal Withholding Elections business process. The Federal form W-4 that the employee completes is used to indicate how much federal taxes to withhold from a paycheck; this form will be completed electronically in Workday as part of the Employee onboarding process.
OASDI (Social Security and Medicare) are mandatory federal payroll taxes. Federal Insurance Contributions Act (FICA) is the combined employee and employer portions of mandatory OASDI (Social Security and Medicare) taxes.
Social Security is withheld on taxable gross income up to an annual wage limit each year.
Medicare is withheld on taxable gross income.
Most payments to employees have Federal Withholding Tax deducted based on the IRS Semi-Monthly Tax Withholding Table, your IRS Form W-4 Withholding Allowance Certificate, and any pre-tax deductions you have elected.
Payments made separately from salary payments are exceptions to the withholding tax guidelines, as follows:
- Supplemental Wage payments (e.g., Awards, Employee Separation Authorization Payments—vacation time paid at separation from the UW—as well as some other payments) have a Federal Withholding Tax rate of 22%.
Annual IRS Reporting
For tax purposes, all Foreign Nationals are required to fill out Form 8843 Statement for Exempt Individuals and Individuals with a Medical Condition.
Resources and information on annual IRS reporting requirements are available through the International Student Services Office (ISS).
Nonresident alien students and scholars use Glacier Nonresident Tax Compliance System to file their individual tax return with the IRS.
Payments made to a Foreign National who performs services outside of the United States are not subject to Federal Withholding Tax, or OASDI (Social Security and Medicare) taxes. Nor is there any US reporting obligation.
If this circumstance applies to you, complete the UW Certificate of Foreign Status and provide proof of citizenship and residency (i.e., a copy of picture page of your passport).
The University of Washington is a withholding agent for the Internal Revenue Service (IRS) and is required to withhold mandated taxes.
All employee wages are taxable unless specifically exempt from tax by a US law or a treaty.
Scholarships and fellowships paid to a Foreign National from a US source are taxable unless specifically exempt from tax by a US law or a treaty.
In general, United States OASDI (Social Security and Medicare) taxes apply to payments of wages for services performed as an employee in the US, regardless of the citizenship or residence of either the employee or the employer.
Exemptions to OASDI
Determination of an exemption from OASDI is based on the calendar year (January-December) you enter the United States.
State Income Tax
Washington is one of seven states in the US that do not have a state income tax. Employees working and residing in Washington have no state income tax liability.
However, if you are working in a state that does have an income tax, the UW is required to withhold income tax for the state(s) in which your services are performed.
Find year-end tax forms and information on how to complete them. Please note: The ISC Payroll Office cannot provide tax advice.
Opt Out of Paper Tax Forms
The ISC encourages all employees to opt out of receiving paper W-2 tax forms, and to instead retrieve tax information online through Workday. Online tax forms are legal documents that meet all the same IRS requirements as paper forms, and are available two weeks before paper tax forms.