NonService Pay Withholding
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.
- 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
- 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.
- 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
- 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.
- Payroll will send the recipient a link to access FNIS where they can complete and submit a Tax Determination Questionnaire.
- Once finalized, the recipient will submit and sign the necessary paperwork with Payroll Services.
- 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.
- If the recipient qualifies for a tax treaty the department will be provided with a W8Ben to attach with the NSP.
- 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).
- The payments made to the recipient will be reported on a 1042-S.
- Forms 1042-S will be created by a third party provider, and will be distributed no later than 15 March.