Payroll Taxes for Non-Resident Aliens is different than taxes for US Citizens. Many countries have tax treaties with the United States which allows Non-Resident aliens an exemption from either all or part of Federal tax withholdings. Different types of VISA Holders get certain exemptions from Federal Tax and FICA/Medicare tax.
An F-1 VISA is specifically for full-time students who come to the US to study at an accredited college or university. These students can also apply for Optional Practical Training (OPT) in their major field of study which allows them to remain in the US for an extended period of time after they have completed their studies. Similar to the F-1 VISA, we have the J-1 VISA for Teachers and Researchers in a specific field of study for a specific amount of time./
The F-1 and J-1 VISA holders are both exempt from FICA/Medicare tax if they become employed for personal services while in the US. They may also be exempt from Federal Tax withholding if their country has a Tax Treaty with the US. Some treaties exempt all wages from tax and others have specific dollar limits that can be earned before they are subject to taxes.
Join us on Clatid to go over what Employers need to know on how to treat these employees for payroll tax purposes. What forms do they need to complete to receive a tax treaty exemption and the specific forms that must be filed at Year-End? Also, what to do if there is not a tax treaty in their country.
We will go over the different types of documents that are considered payroll documents that must be maintained for a specific amount of time. Some forms you might not consider as payroll documents actually are.
Many states have different rules than the Federal regulations regarding these documents. We will touch on a few of these States and give guidance on how to find out more information about their regulations.
Ee will discuss each different type of document in regard to how long you are required to keep the documents. It includes timesheets, payroll changes, additions/deductions from Wages, State taxes and many more.
-VISA F-1 and VISA J-1: Understanding
-Guidance on what taxes they are exempt from and what to withhold
-What forms should be completed by the employee and the employer
-Guidance for you as an Employer on tax treaties and treatment of these employees.
-How to file forms at the end of the tax year
-Helpful websites to access the information needed for tax treaties
-Differences in these types of VISA’s
-Which tax forms are these employee wages reported on
-Correct forms to file for tax treaty exemptions
-Tax Treatment for employees
-Timelines to send in tax forms
-Different tax treatments depending on articles of the treaty
Most employers aren’t familiar with the specific laws that pertain to Non-Resident Aliens who enter the US on an F-1 or J-1 VISA. There are many different VISA types and different ones have different tax implications. These 2 specific types are exempt from required payroll taxes that all other employees are subject to having withheld. This can create issues when the wrong taxes are withheld on these employees.
More and more people are traveling abroad to study and teach in the US. Employers need to be aware to watch for different VISA types and know how to treat employees who may apply to work at their company. These workers being new in our country aren’t aware of what is required of them or what exemptions they have. They rely on the Employer to know what to do.
Tax treaties are also beneficial not only to the Employee but also to the Employer. There are specific Employer taxes that are also waived or exempt for these employees. This can be savings to the Employer as well when the correct forms are completed, and the correct tax treatment of these workers is done properly.
-Payroll Professionals
-Small Business Owners
-Bookkeepers
-Managers
-Tax Professionals
Debbie Cash, CPP is a Business Analyst-Implementation at G&A Partners. She collaborates with Clatid Compliance to provide trainings on payroll and human resources. She was formerly a Payroll Tax/Time and Attendance Specialist at Employer Advantage LLC. G&A Partners is a Professional Employer Organization (PEO) that offers payroll, human resources, benefits management, risk management, and accounting services for businesses and they recently acquired Employer Advantage LLC a former PEO. She has been with the organization since 2006.
Debbie earned an associate's degree in Accounting from MSSU in 1985 and a bachelor's degree in General Business from MSSU in 2006. She obtained her Certified Payroll Professional Certification in October 2006. She has 30+ years of experience processing payroll and payroll taxes for various different companies and professions.
Debbie worked as a Payroll Specialist at Missouri Southern State University from 1993 to March 2006. She attended the International Tax Conference in Wisconsin in 2005 and specialized in International Tax for Student Visa’s. She also worked for Joplin R-8 School District from 1990 to 1993.
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