Purpose

The purpose of this task is to enter Federal tax data for a Nonresident alien employee with Scholarship/Fellowship Grant or Independent Personal Services (Honorariums) and whose country has a tax treaty with the United States.

Helpful Hints

• State and/or Local taxes are not applicable.

Enter Tax Data for NRAs – Eligible Income Code for Scholarship/Fellowship Grants or Independent Personal Services (Honorariums)

Navigation Path

Main Menu > Payroll for North America > Employee Pay Data USA > Tax Information > Update Employee Tax Data

Steps

1. Enter employee’s EMPLID.
2. Check the Include History checkbox to view all of the available records for the employee.
3. Select Include History.
4. Click the Search button.
5. When an employee is hired, the Federal Withholding Status defaults to Single.
6. If the new employee is a Nonresident alien, the tax treaty information (if any) must be entered.
7. To begin, click the plus (+) sign to insert a new effective-dated row.
8. Enter the Effective Date.
9. Special Withholding Tax Status should be changed to ‘Nonresident alien’.
10. Tax Status should remain 'Single.'
11. Refer to the Form W-4 (2020 or later), Employee’s Withholding Certificate, submitted by the new employee and update the Federal Withholding Elements section with any additional amounts provided.
    1. Exempt from FUT is not used, but should always be checked. Expand section to view.
    2. W-4 and W-5 Processing is not used.
    3. Lock-In Letter Details must not be used by agencies, only OSC.
    4. State Tax Options is not used.
12. Expand the Tax Treaty/Non-Resident Data section.
13. The fields in the next steps are used to record information for Nonresident aliens with Scholarship/Fellowship Grants or Independent Personal Services (Honorariums).
14. Enter the employee's Country of residence.
15. Enter the appropriate Eligible Income Code for the earnings type.
16. Enter the Treaty ID associated with the employee's Income Code and Country.
    1. Form W-9 Received is not used.
    2. Form W-9 Effective Date is not used.
    3. Taxpayer ID Number field is only used to enter an ITIN if the NRA has one. The ITIN will begin with a “9” and is not the Social Security Number (SSN).
       NOTE: If the employee has an SSN, do not fill in the Taxpayer ID Number field. Enter the SSN in the National ID field at the following path: Main Menu > Workforce Administration > Personal Information > Modify a Person.
    4. The NRA Withholding Rule is not used.
17. Expand the Education and Government section.
18. In the Date of Entry field, enter the date the employee entered the United States.
    NOTE: This date can be found on the Form 8233 which was submitted by the NRA employee who intends to take advantage of an available tax treaty between the United States and their resident country.
19. The Treaty Expiration Date is automatically calculated and populated by the Payroll System and must not be modified by agencies.
20. In the Form 8233 Received field a selection is required.
21. An entry in the Form 8233 Effective Date is required and must not be backdated.
    NOTE: A new Form 8233 must be submitted every year by the NRA employee who intends to take advantage of an available tax treaty.
22. The Form 8233 Expiration Date field is required.
23. Form W-8 Received should be 'Yes' – for Scholarship/Fellowship Grants only.
24. Enter the Form W-8 Effective Date – for Scholarship/Fellowship Grants only.
    1. Form W-8 Expiration Date is not used – for Scholarship/Fellowship Grants only.
25. Click Save.

Result

Tax Treaty information has been entered into the Payroll System for a Nonresident Alien employee with an Eligible Income Code for Scholarship/Fellowship Grants or Independent Personal Services (Honorarium).