Nonresident Alien Taxation
Alien Taxation
and Forms
and Other Resources
Making Payments to Nonresident Aliens
(NRA)
Honorarium
Honorarium
Purpose
In order to comply with Federal (Internal Revenue Service and Treasury Department) and State (Franchise Tax Board) rules and regulations, each SFSU department must comply with these procedures when making Accounts Payable payments honorarium recipients who are considered nonresident aliens for tax purposes. The Chancellor’s Office requires CSU campuses to comply with the Internal Revenue Code, California Revenue and Taxation Code, and California State University policies and procedures regarding nonresident alien taxation issues. These procedures are intended to assist campus departments when making payments to nonresident aliens.
Procedure and Responsibility
Step 1
Campus Department or Project Director
The campus department or project director must determine if the recipient (payee) is a US Citizen, Permanent Resident or Nonresident Alien (NRA) by administering the Vendor Data Record (STD.204) form.
NOTE: These procedures were written assuming the NRA payee’s time on campus will be limited. Therefore, the campus department or project director should make every attempt to obtain the required information and administer the required forms prior to the payee’s arrival on campus. This will enable the Tax Specialist in Internal Audit to make an early determination of whether the NRA tax residency status, the applicable income tax withholding rate, and whether some or all of the payment is exempt from income tax withholding under a federal income tax treaty.
For Research and Sponsored Programs Accounts – As a reminder the Office of Research and Sponsored Programs (ORSP) must authorize all payment requests for honorarium chargeable to ORSP accounts PRIOR to the activity or event taking place.
A. Administer the Vendor Data Record (STD. 204) form (required by Accounts Payable before any payment can be processed). The form is
available online at: http://fiscaff.sfsu.edu/Reference/Public/Forms/STDT%20204.pdf.
B. If the payee indicates on the Vendor Data Record (STD.204) Form, Box 7 – Vendor Residency Status that he/she is a US Citizen or
Permanent Resident Alien (“green card holder”) for Federal tax purposes, the department or project director will follow usual departmental
and Accounts Payable payment procedures.
C. If the payee indicates or provides information on the Vendor Data Record (STD.204) form, Box 7 – Vendor Residency Status that he/she is
a Nonresident Alien for Federal tax purposes, the department or project director will obtain (by fax, mail, or email correspondence) a copy
of the NRA payee’s passport and US visa (if available), and forward the information to the Tax Specialist along with the Vendor Data
Record (STD.204) and the Honorarium payment authorization form.
NOTE: If the Nonresident Alien receiving an honorarium is a current employee of San Francisco State University, the department or project director will follow usual Human Resources Safety & Risk Management practices/ procedures – Practice Directive P301 Honorarium.
Step 2
Internal Audit
The Tax Specialist will:
A. Review the documents and information the campus department or project director was able to obtain (Vendor Data Record (STD.204),
Honorarium payment authorization form, copy of passport, US visa) from the NRA payee.
B. Determine whether some or all of the payment(s) are exempt under a federal income tax treaty; and
C. Based on the information provided, prepare SFSU and federal forms requiring the signature of the payee. The Tax Specialist in Internal Audit
will forward the necessary forms to the campus department or project director (including the Vendor Data Record (STD.204) and
Honorarium payment authorization forms) to administer before or when the nonresident alien payee arrives on campus.
Step 3
Campus Department or Project Director
Upon the arrival of the NRA payee on campus, the campus department or project director will:
1. Obtain a copy of the NRA payee’s “I-94” – Arrival/Departure card;
2. Administer all SFSU and federal forms provided by the Tax Specialist and obtain the NRA payee’s signature;
3. Forward all of the signed documents back to the Tax Specialist in Internal Audit.
Step 4
Internal Audit
The Tax Specialist will review all the documents received from the campus department or project director and coordinate the payment process with Accounts Payable.
NOTE: If the above procedures cannot be followed and/or the required information cannot be obtained due to time constraints or other reasons, the campus department or project director must obtain as much information and documents from the NRA payee as possible and forward them to the Tax Specialist in Internal Audit
The Tax Specialist will coordinate payment processing with Accounts Payable and/or OSFA to ensure that proper Federal and State income tax is withheld. Since the NRA payee is unable to complete all necessary Federal, State and CSU forms, the payment must be taxed appropriately.
The procedures above are the steps needed to make a payment to an NRA stipend or honorarium recipient. The above procedures do not fully describe the entire process but do outline the necessary steps that campus departments or project directors need to adhere to. Should a campus department or project director need further clarification on the above procedures or need additional information regarding making payments to NRA stipend and honorarium recipients, they should contact Internal Audit and speak to Young Kim, Tax Specialist at (415) 338-2325.