Payroll Services Non U.S. Citizens

NonService Pay Withholding Taxes

Federal tax law requires that WSU must withhold 30% on NonService Pay payments for nonresident alien recipients unless they qualify for a reduced rate or exemption under a tax treaty. To determine if the recipient is covered under a tax treaty, the recipient, in conjunction with central offices, can follow these guidelines.

  1. In order to submit a NSP for an NRA, the department will cross reference the country of citizenship to the list of Tax Treaty Countries
  2. If the country is on the list, the department will ask the recipient if they are interested in doing a tax treaty analysis. This analysis will require a Social Security Number and it might delay payment.
    1. If the recipient is not interested in pursuing a tax treaty, the depart will route the NSP to A/P and payment will be subject to 30% withholding
  3. If the recipient is interested in pursuing a possible tax treaty, the department will send an email to payroll.tdq@wsu.edu with the recipient’s name and WSU ID number.
  4. Payroll will send the recipient a link to access FNIS where they can complete and submit a Tax Determination Questionnaire.
    1. Once finalized, the recipient will submit and sign the necessary paperwork with Payroll Services.
  5. If they do not qualify for a tax treaty, Payroll will notify the department. The NSP will be routed to A/P for processing with 30% withholding.
  6. If the recipient qualifies for a tax treaty the department will be provided with a W8Ben to attach with the NSP.
  7. The NSP and a copy of the W8Ben will be routed to A/P for processing. (Original copies of W8Ben should be kept with department).
  8. The payments made to the recipient will be reported on a 1042-S.