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Honoraria & Reimbursements

Procedures for Paying Honoraria or Reimbursements to Non-resident Taxpayers

 

Download: Honoraria/Reimbursement Form (PDF)

For further information contact:

Janice Bogen
Assistant Vice President & Director
Office of International Affairs
M-70 Jefferson Alumni Hall
Janice.Bogen@jefferson.edu

Paying Honoraria or issuing reimbursements to non-residents for tax purposes or foreign speakers who are here in visa status of any kind is not as easy as paying an individual who is a U.S. citizen, green card holder (permanent resident) or resident alien for tax purposes.

A social security number does not dictate whether a person can be paid an honorarium, but whether or not a tax treaty may be applied if one exists between the speaker’s country of tax residence and the U.S. The rules below apply if the honorarium is $1 or $5,000 or more. These rules also apply to Canadians.

Honorarium payments require extra work. Reimbursements are no problem--everyone is treated the same. Therefore, it is easier to reimburse someone in B1 (Visitor for Business) or WB (visa waiver for business) status than pay an honorarium.

If you plan to pay an honorarium to someone who you are sure is not a U.S. citizen or green card holder, these are the steps that must be followed. Please plan to accomplish the tasks in plenty of time to request a check from Accounts Payable.  If you need a check very quickly, indicate on the request form that you need expedited processing. Requests for Payment must be handed to someone on Tuesday by 3:00 pm for a Wednesday check, and by Thursday before 3:00 pm for a check printed on Friday. It is much more difficult to get what is needed to pay a non-resident alien taxpayer if the request is made after the speaker has left the United States, usually resulting in substantial (6 to 8- week) delays.

At least 3 weeks before the speaker comes, please complete the Honoraria/Reimbursement form along with:

  1. The Office of International Affairs (OIA) needs a copy of the resume or Curriculum Vitae including home address as well as business address. Also send details of the planned program. (M-70 JAH or Janice.Bogen@jefferson.edu ).
  2. OIA needs to know if the speaker has a social security number (SSN) or individual taxpayer ID number (ITIN) from a previous visit to the U.S. to speak or work. If so, the number must be provided. If the speaker has lost the number, a form SS 5 may be submitted to the IRS by the individual to request a new card. www.irs.gov
  3. OIA needs to know:
    • date of arrival, date of departure, the number of days the speaker will be on campus providing service, and
    • type of visa, if any, the speaker will use to enter the US. If the speaker is from a country for which no visa is required and there is a question about which status is appropriate,the visitor should enter in WB (visa waiver for business) status. This will be reflected on the I-94 card, issued and stamped at port of entry. The I-94 card is a small white or green card issued to the individual upon arrival to the U.S., usually stapled inside the passport.

  4. OIA staff enters all the information provided into Windstar Tax Navigator program. This program generates forms that need original signatures: W8BEN and/or 8233 with accompanying letter and/or W7. There is a 9-day statement that must be signed if the speaker is in B or WB status.

  5. If the speaker has no SSN or ITIN, 30% tax will be withheld from the honorarium. If there is no tax treaty between the U.S. and the tax residency country of the individual, 30% tax will be withheld.

    • All applicants for the ITIN can apply in person at the Federal Building at 6th and Arch in Philadelphia with all necessary documentation.

    • If the speaker wishes to apply for an ITIN, the W7 and copies of passport information page, I-94 card front and back (in passport) can be sent to IRS with the W7. It takes at least 6 weeks for the ITIN to be issued, but the speaker will have this number for life or until a SSN may be requested with a valid immigration status for employment.
  6. The Request for Payment (RFP) for an honorarium to pay a non-U.S. citizen or green card holder or non-resident for tax purposes can go to Accounts Payable only after OIA has reviewed the request for the items specified below. Submitting the RFP to Accounts Payable first will delay payment processing.  Remember, OIA must first review and approve the RFP before it will be processed by A/P.
    • signed forms generated by Tax Navigator (W8BEN, 8233 with statement if applicable, 9-day statement)
    • SSN or ITIN or signed W7 copy or a letter of refusal to provide an ITIN
    • cover sheet by OIA, signed by Janice Bogen (or designee) specifying taxability of this payment
    • photocopy of visa page, passport information page, I-94 number (available only after arrival in U.S.) and stamped date of entry in passport.
    • If visitor is in J1 status at another institution, a letter giving permission to speaker to perform this activity at Jefferson (this situation is rare

The Internal Revenue Service, in conjunction with USCIS, monitors honoraria payments, and it is up to departments to provide the required information to OIA before a check is requested.

Janice Bogen                                                              
Assistant Vice-President, Director                                                          
Office of International Affairs     
M-70 Jefferson Alumni Hall

Janice.Bogen@jefferson.edu