Washington University is required to adhere to Internal Revenue Service (IRS) regulations governing the taxation of payments to nonresident aliens, which differ from those that govern payments to U.S. citizens and resident aliens.
A nonresident alien for tax purposes is defined by the IRS as anyone who is not a United States citizen nor a United States resident alien.
A resident alien for tax purposes is defined by the IRS as anyone who meets one of the following two tests for the calendar year:
- Green Card Test: If at any time during the calendar year you were a lawful permanent resident of the U.S. according to the immigration laws, and this status has not been rescinded or administratively or judicially determined to have been abandoned, you are considered to have met the green card test.
- Substantial Presence Test: To meet the substantial presence test, you must have been physically present in the U.S. on at least 31 days during the current year, and 183 days during the 3 year period that includes the current year and the 2 prior years. To satisfy the 183 days requirement, count all of the days you were present in the current year, and 1/3 of the days you were present in the prior year, and 1/6 of the days you were present in the second prior year. Important: Do not count days present in the U.S. as an ‘exempt individual’. An ‘exempt individual’ is a person holding a J-1 or F-1 visa, who is in the U.S. to teach, conduct research, or study. If an individual is physically present in the U.S. for any part of the calendar year, that year counts as a full calendar year in determining their status as an ‘exempt individual’.
An exempt individual may be anyone in the following categories:
- a teacher or trainee temporarily present in the U.S. with a J or Q visa who substantially complies with the requirements of the visa.
- a student temporarily present in the U.S. with an F, J, M, or Q visa who substantially complies with the requirements of the visa.
Payments to Foreign Vendors
There are special documentation requirements when making payments to foreign individuals or foreign entities. Both immigration and tax rules must be followed when making payments to foreign vendors. For information on paying foreign persons, please click here.