|
Background: The Internal Revenue Code has two distinct tax systems: the resident alien/ citizen tax system and the nonresident alien tax system. Resident aliens pay taxes on their worldwide income, just as U.S. citizens do. Nonresident aliens pay taxes only on their U.S.-source income.
Residency status: All foreign employees must complete UC W-8BEN (PDF) (Certificate of Foreign Status for Federal Tax Withholding form). This form is used to determine whether someone is a resident or nonresident alien for tax purposes. After completing this form, read relevant information:
Note: This form replaces the AT1 (Statement of Citizeship and Federal Tax Status) and is no longer required of lawful permanent residents (green card holders).
Nonresident alien information
Tax withholding: Nonresident aliens file the UC W-4NR/DE 4 (Nonresident Alien Employee's Federal/ State Withholding Allowance Certificate. You can obtain this form from the payroll contact in your department or download it here:
Tax treaty/ income tax exemptions: Nonresident aliens from countries with which the United States has a tax treaty agreement can exclude some or all of their income from Federal Income Tax withholding. Most treaties specify a limited number of years or a limited amount of compensation that an individual is eligible for the exemption. For more information, see the Internal Revenue Service (IRS) Publication 901, U.S. Tax Treaties (PDF).
Nonresident alien employees (typically those on F-1 and J-1 visas) who earn salary or wages and are eligible for an income tax exemption must file IRS Form 8233 (Exemption From Withholding on Compensation for Independent Personal Services of a Nonresident Alien):
All alien students, teachers, researchers, and fellowship recipients claiming exemption must provide a tax treaty statement. Forms are organized by category (teacher/ researcher, student, or fellowship recipient) and country. Treaty forms are only valid for the current year and new forms must be filled out with each year of eligibility. Fellowship recipients (without salary) must complete section G of the UC W-8BEN (Certificate of Foreign Status for Federal Tax Withholding form). Social Security (OASDI) and Medicare tax: Nonresident aliens holding F-1 or J-1 visas are exempt from Social Security and Medicare taxes. Individuals on other visas are subject to Social Security and Medicare taxes as are career employees. Employees with limited appointments pay into the Defined Contribution Plan (DCP-casual) in lieu of Social Security. - State tax: Aliens are subject to the same state tax withholding rules as U.S. citizens.
Resident alien information
- Tax withholding: Resident aliens file the regular UC W-4/DE 4 (PDF) (University of California Employee's Federal-State Withholding Allowance Certificate).
Tax treaty/ income tax exemptions: Resident aliens (typically those on H-1 visas) who earn salary or wages and are eligible for an income tax exemption must complete IRS Form W-9 (Request for Taxpayer Identification Number and Certification).
All alien students, teachers, researchers, and fellowship recipients claiming exemption must provide a tax treaty statement. Forms are organized by category (teacher/ researcher, student, or fellowship recipient) and country. Treaty forms are only valid for the current year and new forms must be filled out with each year or eligiblity. Fellowship recipients (without salary) must complete section G of the UC W-8BEN (Certificate of Foreign Status for Federal Tax Withholding form).
Social Security (OASDI) and Medicare tax: Resident aliens are subject to Social Security and Medicare taxes regardless of visa status. The only exception is student employees who must carry 6 units to be exempt. - State tax: Aliens are subject to the same state tax withholding rules as U.S. citizens.
Other resources for non-U.S. citizens
Questions? Contact Paul Rodriguez, (858) 534-3241.
| 
At Your Service Online
