Foreign Nationals Payment & Tax Information
As detailed on this page, the ISC provides treaty and payroll tax resources to foreign nationals and the staff who support them. For all other matters related to foreign nationals, refer to UW Global Operations Support as your first point of contact for these and other topics:
⇒ Compliance and legal matters including immigration issues, work eligibility, and visa renewals
⇒ Human resources procedures such as hiring abroad and working abroad
⇒ Purchasing and payments for international activities
Definitions
A Foreign National is a person who is not a citizen of the United States or a permanent resident alien. The UW welcomes Foreign Nationals.
Additionally:
- For tax purposes, a Foreign National is generally a F-1 full-time student who has been in the US for less than five calendar years, or a J-1 teacher/researcher who has been in the US for two calendar years or less out of the last six calendar years.
- For immigration purposes, a Foreign National is a person who is not a citizen or permanent resident of the US who has been admitted on a visa for a temporary stay that will end when the purpose of that stay has been met.
For further terminology, refer to the Glossary of terms maintained by UW Global Operations Support.
Getting Started in Glacier Tax Compliance
Glacier Tax Compliance is a secure, web-based application used by the UW to determine the correct taxation on wages for foreign national employees. Visit the Getting Started in Glacier Tax Compliance page for details.
Work Authorization & Extending Work Authorization
Overview
Federal law requires that all new employees fill out USCIS Form I-9 Employment Eligibility Verification to document that they are authorized to work in the United States. It is unlawful for the University to knowingly employ a Foreign National not authorized to work in the United States.
Similarly, the University can only make payments to Foreign Nationals who are legally authorized to be in the United States. It is critical that your scholarship and fellowship payments are taxed appropriately.
Verifying Employment Eligibility
Employment Eligibility Verification is a required form for wage payments; it is not required for scholarship and fellowship payments.
Documents that prove Work Authorization include:
- Form I-20 for F-1 visa holder
- Form DS-2019 for J-1 visa holder
- Form I-797C Notice of Action or Form I-94 with stamp for H-1B visa holder
- Form I-94 for TN visa holder
- Employment Authorization Card
Common visa types for Foreign Nationals are included in the matrix below. This population is required to enter an expiration date for their I-9 work authorization. This can be confusing to find! Use this matrix to help:
| Visa Type | Which Associated Form the Date is On? | Field Name on the Form |
|---|---|---|
| F-1 | I-20 | Program End Date*
*On an old form I-20, revised in 1988, the latter date on Question 5, “complete studies no later than…”) |
| J-1 | DS2019 | 3. Form Covers Period: > To (mm-dd-yyyy): |
| TN | I-797A or I-797B | “Valid to” date in Notice Type box |
| H1-B | I-797A, I-797B, or Employment Authorization Card |
“Valid to”, or Card Expires |
| F-1 OPT, DACA, H-4, J-2, L-2 | Employment Authorization Card | Card Expires |
Refer to the USCIS website for more information on document requirements.
Completing Form I-9 in Workday
- Refer to the ISC’s Form I-9 Journey Map (PDF) to familiarize yourself with the process. Pay particular attention to step 3, which provides guidance to individuals who are not US citizens.
- In Workday, complete Section 1 of the Form I-9 – refer to the steps described in the Complete Form I-9 User Guide. Leave the “U.S. Social Security Number” field blank if your SSN is not available at the time of hire.
- Present the appropriate documentation to your department’s I-9 Coordinator.
- Your I-9 Coordinator completes Section 2 of Form I-9.
- Complete Section 3 of Form I-9 according to your visa type – refer to the following instructions for guidance:
Extending Work Authorization
Work Authorization documents have expiration dates. USCIS rules require employers to re-verify Work Authorization on USCIS Form I-9 Employment Eligibility Verification.
These rules also apply to extending Foreign Nationals’ authorization to receive scholarships and fellowships. It is critical that your scholarship and fellowship payments are taxed appropriately.
Advance notice will be provided to you as the process for reviewing or extending dates of employment eligibility can be a lengthy one.
You and your department will receive notifications prior to expiration of your Work Authorization.
You are responsible for initiating the renewal process. Contact the International Student Services Office (ISS) or International Scholars Office (ISO) to get started.
Then, bring your renewal documents to your department’s Form I-9 Coordinator.
Your department is responsible for verifying your new Work Authorization documents in Workday. Follow these steps:
- You complete Name and Social Security Number in Section 1 of Form I-9.
- You present documentation to your department’s Form I-9 Coordinator.
- Your department’s Form I-9 Coordinator completes Section 3 of Form I-9.
- Employee completes Section 3 of Form I-9 according to visa type:
Special rules may apply to the H-1B visa allowing you to work for an additional 240 days from the expiration date of your current Work Authorization if your Work Authorization extension application is pending.
If this exception applies to you, make sure to include a copy of the Form I-797C Notice of Action when submitting your I-9 in Workday.
E-Verify for OPT/STEM Extensions
The University of Washington participates in the E-Verify process.
Only employees who are paid from a federal contract or grant with an E-Verify clause are required to go through the E-Verify process.
The UW Payroll E-Verify account number is 293411. Use this number on OPT/STEM extension forms.
Federal Withholding Taxes & Tax Treaties
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.
Tax Treaties
A tax treaty is negotiated between the United States and a foreign country. The purpose is to reduce double taxation on residents of the other country.
A list of current wage tax treaties is available in IRS Publication 901 (PDF).
To make an initial assessment of their tax treaty eligibility, Foreign Nationals should review IRS Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities (PDF).
To Note
A Social Security number (SSN) or Individual Tax Identification Number (ITIN) is required for wage reporting to the IRS and to claim tax treaty benefits.
If the you are eligible for a tax treaty benefit, Glacier will generate an IRS Form 8233 (PDF) and an IRS Form W-4. IRS Form 8233 must be renewed each calendar year through Glacier.
If the ISC determines that you are eligible for a wage tax treaty exemption:
- A refund will not be made for any Federal Withholding Tax previously withheld during the current calendar year.
- Upon receipt from Glacier of a completed Form 8233 and the Treaty Attachment, Federal Withholding Tax will not be taken out of future paychecks until the tax treaty exemption dollar limit is reached.
Failure to supply the required documentation may result in incorrect taxation.
Canada Income Tax Treaty
IRS Publication 597 (PDF) provides information on the income tax treaty between the United States and Canada, including provisions that often apply to US citizens or residents who may be liable for Canadian tax.
Treaty provisions are generally reciprocal; the same rules apply to both treaty countries. Therefore, a Canadian resident who receives income from the United States may refer to this publication to see if a treaty provision may affect tax they pay to the United States.
Foreign Nationals Not Eligible or Not Claiming Wage Tax Treaty
You are required to complete and submit IRS Form W-4 in Workday. A Social Security number is required. Special rules apply to nonresident aliens for tax purposes when completing IRS Form W-4.
Instructions for Nonresidents completing the IRS Form W-4
If you do not complete an IRS Form W-4, your withholding will default into a Single/Married Filing Separate category with no adjustments.
Foreign National Scholarship and Fellowship Recipients
If you are eligible for a Scholarship or Fellowship tax treaty, complete IRS Form W-8BEN (PDF). A Social Security number (SSN) or Individual Tax Identification Number (ITIN) is required.
IRS Form W-8BEN is valid for three calendar years and must be renewed through Glacier.
A list of current Scholarship and Fellowship tax treaties is available in IRS Publication 901 (PDF).
If you are eligible for a tax treaty benefit, Glacier will generate the required forms.
Scholarship and Fellowship payments are subject to 14% Federal withholding tax if there is no tax treaty exemption.
OASDI (Social Security & Medicare) Taxes
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. The calendar year may only be a partial year. For example, if you entered the United States on December 31, 2016, 2016 counts as your first calendar year.
Students on F-1 or J-1 visas are exempt from OASDI taxes for the first five calendar years.
Scholars (non-students) on J-1 visas are exempt from OASDI taxes for the first two calendar years.
Students and scholars on J-2, H-1, E3, and TN visas are required to pay OASDI taxes.
Social Security Number and Individual Taxpayer Identification Number
IRS regulations mandate that Foreign Nationals must have either a Social Security number (SSN) or an Individual Taxpayer Identification Number (ITIN) in order to receive any tax treaty benefits.
If a foreign national is receiving wages, you must apply for a Social Security number with the Social Security Administration.
If a foreign national is receiving Scholarship or Fellowship payments, but not wages, you may apply for an Individual Taxpayer Identification Number (ITIN).
When you receive your Social Security Number:
- Present your Social Security Card to your department. Your department will update the information in Workday.
- If you are a Foreign National student, you are also required to present your Social Security Card to the Registration Office, 225 Schmitz Hall, for updating in the Student database.
Failure to notify your department and the Registration Office may result in incorrect taxation.
Foreign Nationals Working Outside the US
Ensuring Correct Taxation
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.
As a result, the following two steps must be taken to help ensure that a Foreign National employee is not taxed incorrectly:
1. Confirm/Update the Employee’s Work Location in Workday.
If the employee’s Work Location in Workday is set to a local address, the employee’s pay will be subject to Washington state taxes. Make sure the employee’s Work Location is set to their out-of-country work location.
To verify the employee’s work location, navigate to their Worker Profile page in Workday and, under Job Details, review Location. If the Work Location needs to be updated, follow the guidance found in the Change Job – Data Change – Voluntary Location or Work Shift Change User Guide.
When updating the Work Location in Workday, if the country in which the employee resides/works is not listed, please contact the ISC for guidance.
2. Submit the UW Certificate of Foreign Status to the ISC.
The employee will need to complete and sign the UW Certificate of Foreign Status to certify that the they are not a US citizen or resident of the US, and that all UW activities and services will be performed outside of the United States. They will also need to provide proof of their citizenship/residency. Feel free to share these instructions for completing the UW Certificate of Foreign Status with your employees.
Additionally, the department will need to provide a confirmation letter (essentially, a letter of support) stating that all services will be performed outside of the United States. A sample confirmation letter is available for reference.
Once completed, the department will then submit the following documents to the ISC (scanned copies are acceptable):
- The employee’s UW Certificate of Foreign Status
- The employee’s proof of citizenship/residency
- The department’s confirmation letter
Tax Documents
UW Foreign National employees who live and work outside of the United States, and who have successfully completed and submitted the above paperwork, will not receive any United States tax forms related to the work performed overseas.
You can always find this information – including a link to a sample confirmation letter – on our Foreign Nationals Payment & Tax Information page, which can be quickly accessed by using the “Your Pay & Taxes” drop down menu located in the purple navigation bar on the top of the ISC website.
Year-End Information for Foreign Nationals
Annual IRS Reporting
For tax purposes, all Foreign Nationals are required to fill out Form 8843 (PDF).
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.
Annual Forms Requiring Renewal
IRS Form 8233 (PDF) and Tax Treaty Attachment for tax exemption on wages are generated through Glacier. These forms must be renewed every year.
IRS Form W-8BEN (PDF) for tax exemption on Scholarship/Fellowship/Stipend payments is also generated through Glacier and is valid for three years.
University of Washington employees cannot provide personal, legal, or tax advice.
Documents Filing Requirements
For instructions on how to fill out IRS forms, refer to the appropriate table below.
Employee
| Type | W-2 | 1042-S |
|---|---|---|
| US Citizen or Immigrant (more info) |
Instructions | |
| Foreign National Nonresident Alien for Tax Purposes (more info) Visa Types: F-1, J-1, H-1B, TN, O-1, E-3, EAD |
Instructions |
Instructions |
| Foreign National Resident Alien for Tax Purposes (more info) Visa Types: F-1, J-1, H-1B, TN, O-1, E-3, EAD |
Instructions |
Undergraduate Student
| Type | 1042-S | 1098-T |
|---|---|---|
| US Citizen or Immigrant (more info) Visa Types: F-1, J-1 |
Instructions | |
| Foreign National Nonresident Alien for Tax Purposes (more info) Visa Types: F-1, J-1 |
Instructions |
|
| Foreign National Resident Alien for Tax Purposes (more info) Visa Types: F-1, J-1 |
Instructions |
Graduate Student/Doctoral Candidate
| Type | 1042-S | 1098-T |
|---|---|---|
| US Citizen or Immigrant (more info) |
Instructions | |
| Foreign National Nonresident Alien for Tax Purposes (more info) Visa Types: F-1, J-1 |
Instructions Wages under tax treaty limits ($ or time) |
|
| Foreign National Resident Alien for Tax Purposes (more info) Visa Types: F-1, J-1 |
Instructions |
Retiree
| Type | 1042-S | 1099-R |
|---|---|---|
| US Citizen or Immigrant (more info) |
Instructions | |
| Foreign National Nonresident Alien for Tax Purposes (more info) Visa Types: F-1, J-1, H-1B, TN, O-1, E-3, EAD |
Instructions |
|
| Foreign National Resident Alien for Tax Purposes (more info) Visa Types: F-1, J-1, H-1B, TN, O-1, E-3, EAD |
Instructions |
Non-UW Student Scholarship/Fellowship Recipient
| Type | 1042-S | Stipend Letter |
|---|---|---|
| US Citizen or Immigrant (more info) |
Instructions | |
| Foreign National Nonresident Alien for Tax Purposes (more info) Visa Types: F-1, J-1 |
Instructions | |
| Foreign National Resident Alien for Tax Purposes (more info) |
Independent Contractor
| Type | 1042-S | 1099-Misc |
|---|---|---|
| US Citizen or Immigrant (more info) |
Instructions | |
| Foreign National Nonresident Alien for Tax Purposes (more info) Visa Types: B-1, VWB, B-2, VWT, F-1, J-1, H-1B, TN, O-1, E-3, EAD |
Instructions | |
| Foreign National Resident Alien for Tax Purposes (more info) Visa Types: B-1, VWB, B-2, VWT, F-1, J-1, H-1B, TN, O-1, E-3, EAD |
Instructions |
Resources
- Global Operations Support for Foreign Nationals Working in the U.S.
- Stipend Letter Instructions
- Year-End Tax Resources: Tax Forms
