Inviting a Foreign National to Wake Forest University can have unexpected challenges. The different visas that are available to Foreign Nationals often have different requirements that must be met in order for the individual to legally visit Wake Forest. Please consult with The Center for Immigration Services and Support prior to inviting any Foreign National to Wake Forest.
In order to process a payment to a Foreign National, whether it’s a scholarship or honorarium or to cover travel costs, the University requires certain information. This page will help guide you to the necessary forms, policies, and procedures that should to be followed in order to properly pay a Foreign National.
Tax Information for Scholarships, Awards and Grants for Foreign Students
United States Citizenship and Immigration Service (USCIS) regulations limit the types of payments that can be made to persons who are not citizens or permanent residents of the United States. Whether such payments are allowed is based on the current immigration status of each individual, as stated on the individual’s Form I-94. Depending on the current immigration status of an individual, an individual may be permitted to receive one of the following types of payments or a combination thereof: scholarships/fellowships; wages; or prizes or awards.
Payment to or on behalf of individuals of certain immigration status may be prohibited.
Fellowship or Scholarship payments are made to assist a person in pursuing a course of study or research. There are two types of scholarships and fellowships, qualified and non-qualified. Qualified scholarships and fellowships are amounts that directly pay for tuition, fees, books, and required equipment for classes. Qualified scholarships and fellowships are exempt from taxes. Non-qualified scholarships and fellowships are amounts for room and board, sports/personal equipment, living expenses, medical expenses, travel stipends and other non-required expenses. For F-1 and J-1 students, researchers and scholars, non-qualified scholarships and fellowships are subject to 14% federal withholding tax and 6% state tax, unless exempt from tax because of an existing tax treaty. The withholding taxes are the responsibility of the student. If the department involved wants to reduce the tax burden on the student, please contact the Tax Department via email email@example.com to discuss possible options..
Fellowship and Scholarship grants paid with funds that have come from the visitor’s country of residence (or another country outside the U.S.) are not subject to federal income tax or tax withholding, nor is there any U.S. reporting obligation. The exclusion applies only to individuals who are not U.S. residents or citizens. Such grants are considered to be “sourced” in the foreign country and, therefore, are not subject to U.S. tax laws.
Prizes and Awards that are provided as a result of an educational contest or competition to a Wake Forest student are usually subject to Federal 30% and State 6% withholding. These prizes and awards will be reviewed to determine whether recipients in F or J visa status are eligible for a reduced rate. Countries with a tax treaty for prize income include: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Tunisia, Turkey, Ukraine, and the United Kingdom.
The Tax Department will review all payments to Foreign Nationals to determine if the payment is allowed and what withholding rate, if any, will be applied to the payment. Business Managers are responsible for insuring that the individuals complete the Foreign National Information Form (FNIF) completely (with all required attachments) prior to submitting the payment voucher to Accounts Payable.
A table that indicates the types of payments that could be made to a Foreign National and the required forms necessary to process the payment is available in Appendix 3 of the Tax Guide for Foreign Visitors (PDF).
- Publication 970 from the Internal Revenue Service (PDF) is available for more information on scholarships, fellowships, and grants.
- Foreign National Information Form (PDF)
U.S. Tax Requirements for Foreign Visitors
Foreign visitors to Wake Forest University may be subject to income tax on any payments or other benefits that they receive while at the University. A Foreign National Information Form (PDF) is required for all Foreign Nationals who visit Wake Forest University. Payments which may be taxable include:
- Employee wages
- Independent contractor payments (honoraria)
- Fellowship and scholarship payments
- Travel reimbursements
- Payments made on behalf of the visitor
Income tax on employee wages is generally withheld at the graduated rates mandated by law. Wages are also subject to 6.2% FICA tax. Income tax withholding rates on independent contractors (honoraria), fellowships and scholarships can range from 0% (a tax treaty applies) to 30% (no treaty available). Tax treaties exist between the United States and 66 other countries so it is possible that what might be taxable to one visitor may not be taxable to another. The Tax Department can assist in determining if a treaty is available and which withholding rate may apply.
North Carolina state income tax withholding applies to all employee wages unless the wages are exempt by treaty. Generally 6% North Carolina income tax is withheld on all independent contractor payments as well.
See Section 3.1 of the Tax Guide for Foreign Visitors (PDF) for more information on what types of income may be subject to income tax.
An Individual Tax Identification Number (ITIN) can be issued to an individual who is not eligible to receive a Social Security Number. For example, student athletes who receive athletic scholarships or consultants who expect to receive an honorarium can apply for ITINs. An ITIN cannot be used for employment. To be eligible for a tax treaty a person MUST have an ITIN or Social Security Number. Some countries have tax treaties with the United States that will allow a student to reduce or eliminate federal and state withholding on the non-qualified portion of a scholarship. See section 3.2 of the Tax Guide for Foreign Visitors (PDF) for more information on the ITIN application process.
Some foreign visitors may be eligible for a Social Security Number (SSN). If a foreign visitor is receiving wages as an employee they will need to obtain a SSN. The local Social Security Administration Office is located at 1370 Lockland Ave, Winston-Salem, NC 27103; 336.722.1132. A foreign visitor will need their passport and at least one other piece of identification when they visit the Social Security Office. Other than assisting in completing the Form SS-5 (PDF). Wake Forest University personnel cannot represent a Foreign National in obtaining a Social Security Number.
If you are considering inviting a foreign person to Wake Forest University you should contact Global Programs and Studies prior to the issuing the invitation. They will be able to assist you in obtaining the proper immigration information for your situation. It is important that the visitor have the correct visa; using an incorrect visa could result in substantial penalties for the University and for the visitor. An incorrect visa could also prohibit the University from paying an honorarium to, or expenses for your visitor.
The prospective visitor must be invited to Wake Forest with an invitation letter or email. This letter or email should include why the visitor is coming to Wake Forest and what payments, if any, will be made to the visitor. The letter could, for example, indicate that Wake will pay for the visitors travel expenses up to a specific dollar amount but no honorarium will paid to the visitor. This is to help the University remain in compliance with the Department of Labor wage requirements. Please contact the Tax Department if you have any questions about the invitation letter.
The visitor should complete a Foreign National Information Form. This form will go to the Tax Department or to the Payroll Department, depending upon whether the visitor will be an employee or a short time visitor.
Depending upon which country they are visiting from they may be eligible for a tax treaty. The treaty could reduce or eliminate any tax withholding that the payment they are to receive may be subject to. The visitor must have an Individual Tax Identification Number (ITIN) or Social Security Number in order to use a tax treaty. If they do not have an ITIN please contact the Tax Department, we may be able to assist in obtaining an ITIN.
Just because two visitors are coming from the same country does not mean that their immigration needs are the same. If you have questions about a foreign visitor please contact the Tax Department or Global Programs and Studies.
Even if the visitor is paying his/her own expenses and will not receive an honorarium from the University, Global Programs and Studies needs to be notified in advance of the visit.
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If you are a Foreign National and you need to travel for your education or for your job, you need to make sure that you have the appropriate permissions from Global Programs and Studies. Some visa types will require prior permission before you travel to a conference or workshop. Please refer to the Business Expense Policy for the documentation required to substantiate the expense.
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The Tax Department reviews all payments to businesses and individuals located in foreign countries to determine if federal tax withholding is required on the payment. For example, when goods are purchased from a foreign vendor no tax withholding is required. However, if the right to use software is being purchased, withholding tax may apply to the transaction. In some cases we can assist the vendor in obtaining the correct documentation to reduce or possibly eliminate the tax withholding requirement by applying a tax treaty if one exists between the US and the other country. Please contact the Tax Department prior to the transaction if you have any questions.
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The W-8BEN is a Certification of Foreign Status for individuals. The Form W-8BEN-E is a Certification of Foreign Status for businesses. (Just like the W-9 is for certifying U.S. status.) From it we get your name address and whether you have a U.S. Tax Identification Number (TIN). Generally foreign nationals or businesses are subject to 30% federal tax withholding on payments they receive from US sources. We asked for a Form W-8BEN (or W-8BEN-E) because we need to establish that you are not a US person and that you are the owner of the payment we are about to make. If you have a US Taxpayer Identification Number (Social Security Number, Individual Taxpayer Identification Number or Employer Identification Number) it should be entered on the form. This allows us to determine whether you are eligible to use an income tax treaty for a reduced withholding rate.
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A W-9 is a W-8BEN for U.S. Persons; it is a certificate of U.S. Residency. We asked for a W-9 so that we may confirm your tax identification number, status and type of business prior to making the payment you are to receive. We need this information so that we may, if required by law, report the payment to the Internal Revenue Service. The W-9 is filed by U.S entities, Citizens and Residents. Tax Treaties with some countries (e.g. China) are available to visa holders who are U.S. Tax Residents, even after many years here. When this occurs, the tax treaty is filed on form W-9 rather than W-8BEN.
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We use the information requested on the FNIF to help us determine your U.S tax situation. From the FNIF we determine your immigration status, your country of Citizenship and Residence, the type of income you’ll be receiving and the duration of time you’ll be in the U.S., and even if you qualify for an income tax treaty. Since there are restrictions on payments to certain visa types we also use the FNIF to determine if we can even make the payment to you without endangering your visa status. The type of payment you are receiving and visa status may allow us to withhold taxes at a lower rate than the usual 30%.
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You may elect to tax your non-qualified scholarship through payroll, which sometimes reduces the tax withheld.
You can potentially reduce or eliminate the tax withholding on your scholarship, if a tax treaty exists between the US and your home country. To claim treaty benefits you must have a U.S. Tax Identification Number (TIN). To determine whether your home Country has a Treaty with the U.S., please contact the Tax Department. The Tax Department can help you apply for a TIN if you do not already have an Individual Taxpayer Identification Number (ITIN) or Social Security Number (SSN). It is important to understand that not all tax treaties are written to exclude scholarships from taxation. Tax treaties eliminate U.S. tax, but may generate tax in your home country if scholarships are taxable there.
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Foreign National Information Form
Complete this form when a Foreign National is being paid by the University while in the United States. This form covers any type of payment (e.g. honorarium, scholarship, wages or business-related reimbursement). The form must be completed in its entirety. If any additional forms are requested, those forms need to be attached to this form for review.
IRS Tax Forms
The campus should use these forms to submit tax information to Accounts Payable.
Use Form W-9 (Request for Taxpayer Identification Number and Certifications) for US citizens and resident aliens that the University does business with. Generally, if Accounts Payable has a W-9 on file, another form is not needed. To verify if Accounts Payable has a W-9 on file, email firstname.lastname@example.org for more information.
Use Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) for individuals and Form W-8BEN-E (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting) for business entities, for any non-US citizens and non-resident aliens. Please request the correct form when setting up vendor businesses or individuals in a foreign country. If the business or individual has an US ITIN or employer identification number, include that information on the form. If not, please enter the foreign tax ID number.
Use Form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business) when an individual or entity makes a cash payment of over $10,000 for any University purpose, e.g. tuition payment, donation, etc.
If the University is doing business with an individual that is performing services in the United States and they are a non-resident alien, the individual must complete the Foreign National Information Form
For more information, please visit www.irs.gov
- W-9 Form
- W-9 Instructions
- W-8BEN Form Certificate of Foreign Status-Individuals
- W-8BEN-E Form Certificate of Foreign Status-Entities
- W-8BEN Instructions
- W-8BEN-E Instructions
- W-2 Instructions
- W-4 Employee Withholding Allowance Certificate
- SS-8 Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding
- Form 8300 Report of Cash Payments over $10,000 Received in a Trade or Business
- Form 8843 Statement for Exempt Individuals and Individuals With a Medical Condition
- NC-4 Employee’s Withholding Allowance Certificate
- NC-4 Instructions
Tax Guide for Foreign Visitors
The purpose of this guide is to inform foreign students, faculty and staff of the rules that Wake Forest University operates under, based on the tax and immigration laws of the United States. In addition, this tax guide serves as a tool for University personnel who interact with foreign students, faculty and staff. Wake Forest University is a Certifying Acceptance Agent and can assist foreign students, faculty, staff and visiting speakers in obtaining the required Taxpayer Identification Number to file U.S. tax returns or make use of an income tax treaty.