Non-Payroll Payments to Foreign Nationals


General Information

If your vendor is a US person living outside the US, the correct form for them to fill out and send in to Purchsasing Vendor Set-up Group is UNM's Substitute W-9

As part of vendor maintenance in Banner, the UNM Purchasing Department requires all Foreign National (FN) vendors or payees to provide a signed Federal Form W-8 BEN. Please send signed W-8Ben as part of the Vendor Add process, which includes the electronic Vendor Add/Change form, to Vendor Set up Group at vendors@unm.edu or fax to 277-7774. This applies to both foreign national individuals and corporations.  You can obtain this form at  IRS website: http://www.irs.gov/pub/irs-pdf/fw8ben.pdf . See instructions for filling out this form at UNM W-8BEN instructions.

UNM requests that a foreign vendor fill out atleast Part I of this form and sign. The Federal W-8 BEN Form requests a US Social Security Number (SSN) or a Tax Identification Number (TIN). While the form must be filled out and signed, the disclosure of the SSN or TIN is voluntary. However the IRS will not allow UNM to extend Tax Treaty Benefits without this information. And without Treaty Benefits, the Foreign national may be subject to Foreign Tax Withholding up to 30%.

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Fees for services performed inside the US by Foreign Nationals or Foreign companies are subject to US Taxation Regulations.

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Payments paid directly to or to a third party on behalf of foreign nationals require a more stringent documentation and review process per federal law. In addition to normal UNM UBPP requirements, UNM Taxation Issues Staff must approve all non-payroll payments to these FN payees or vendors, as well as payments to foreign students.  There are some types of payments that may be prohibited to FNs who enter the US with certain types of visas.  If the payment is found to be either taxable or reportable, a Social Security Number (SSN) or an Individual Tax Identification Number (ITIN) will be requested in order to correctly issue a Federal Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. Disclosure is voluntary. FN vendors who do not disclose this information or who do not have a TIN or a SSN may be subject to Foreign Tax Withholding. A Canadian Social Insurance Number does not satisfy this requirement.


It is not possible to list all the different facts and circumstances that might surround payments to or for a Foreign national invited to UNM. This web page only offers information on the most common visa types that UNM foreign visitors enter the US under. You may want to review the IRS Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Entities. We suggest that initiating Departments please contact Taxation Issues staff for further information.

Note: For Foreign Nationals who enter the US, Homeland Security documentation must be obtained/copied while the national is in the U.S.  Persons from a visa waiver country must present a copy of the page of their passport that shows their name, picture and their country of origin and a copy of the page inside that includes the oval HomeLand Security stamp dated for this visit to UNM/US. For other, non-visa waiver countries, this same information pages will be found in their US Visa.

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Pre-approval for use of P-Card for Foreign National Travel


If a P-Card is going to be used to pay any portion of travel expenses (airfare, hotel, food) on behalf of foreign national, who is not a UNM student or employee , Taxation must approve before purchasing. Please read the following before submitting this form:

  • Your PCard must have the Travel option added in order to pay for lodging expenses.
  • A copy of the formal UNM Letter of Invitation that was sent to the foreign national will be requested, unless they are already inside the United States. Please email the letter to tax@unm.edu or fax to 277-0101.
  • Taxation staff may require more information before approving the purchase. It is possible that payment may not be allowable dependent upon the facts and circumstances.

 

  • Approval will be for Foreign Tax purposes only and is pending receiptof a copy of the foreign national's Oval Homeland Security Stamp that they received upon entry into the US for this visit, along with a copy of their picture and name page. This will be found in either their visa or passport documentation.

 

  • When your sponsored foreign national arrives in the US, please send this documentation to Unrestricted Accounting Main, MSC01 1260 Taxation or fax to (505) 277-0101 referencing the foreign national's name and Banner ID, if they have one.
  • We suggest that you have the Foreign National sign a W-8BEN form (see first paragpraph on this web page) while they are here. This form is required for Vendor Set-up.

 

  • Please keep a copy of the approval email in your Department PCard log. Please send it to Purchasing onlywith your PCard log for their review.

 

  • In addition to the electronic  form that must be filled out  and submitted, if your foreign visitor is arriving from outside the US, Taxation requests  a  copy of the  letter of invitation that was sent to the foreign visitors because this will ensure that they get a ‘business’ visa type.  When your foreign visitor arrives in the US, their passport and visa documents will be processed by the US Border Customs Agent.  If they can produce a letter of invitation from your department  1>on UNM letterhead , 2>with their name , 3>the dates they will be in the US,  4>a business purpose/reason why they are being invited, and 5>signed by a UNM employee ; they will receive a visa stamp other than tourist . There are specific situations where a tourist visa may impede the length of their stay or limit the types of payments or reimbursement that may be made to or for them. If your foreign visitor is already inside the US, a letter of invitation is not required.

 

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OTHER TYPES OF PAYMENTS:

  • Subscriptions & Organization dues
  • Purchases of tangible goods
  • Registration fees for conferences out side the U.S
  • Services performed outside the U.S.

For these types of payment above, submit Direct Pay Approval Form (DP-EZ) to Taxation for approval. No visa documentation is required.

  • Travel

Payments for travel reimbursements to FNs nationals who are not UNM students or staff either made directly to the FN or to another on behalf of the FN require a copy of the oval HomeLand Security Stamp dated for this visit to the US, a copy of the Visa or the Passport front page with the Foreign national's picture/ country information and the page with the visa stamp for this current visit, and a business purpose that demonstrates how the University benefits from this travel.  Submit this information along with the Direct Pay Approval Form/DPEZ to Taxation Issues staff for approval.

  • Travel - UNM Foreign Students

Payments for travel reimbursements to UNM Foreign students may be subject to 14% federal foreign tax withholding. The business purpose for these payments must clearly demonstrate that UNM benefitted more than the student. A business purpose that shows they performed some service (example: presenting a paper or poster or representing UNM at a business meeting) for UNM or that the travel was required as part of the curriculum for every student in their program would demonstrate how UNM benefitted more. A business purpose that shows the travel was to enhance their education (example: conference or workshop attendance) would be considered personal and subject to 14% withholding.

  • Particpant Fees

Payments to Foreign Nationals, including UNM foreign students, for participant fees may require 30% foreign tax withholding. If so, the DPEZ payment document should be made for 70% the gross amount of the participant fees. UNM Taxation staff will create a JV to charge the tax. Please contact Taxation Issues staff for assistance.

  • Royalties

A Foreign Entity receiving royalties must provide their address in their country of residence. Even though these foreign entities never enter the U.S (so, no Visa or oval Homeland Security documentation are required); typically, unless vendor has a 1>US tax ID number (TIN or SSN) and 2>treaty benefits are available and 3>claimed treaty benefits in writing, there will be a 30% withholding required. Please contact Taxation Issues staff for assistance.

  • Honoraria

Payments for honoraria, require a copy of the oval Homeland Security stamp dated for this visit to the US, a copy of the visa (or a visa waiver statement), and a business purpose that demonstrates how the University will benefit from this expense. Honoraria are considered by the IRS to be services. Legal restrictions include a 9-5-6 rule. This means that services cannot extend beyond nine (9) days and the FN must attest they have not received more than five (5) other honoraria payments in the past six (6) months, via a signed UNM B and VWB Attestation Form. This documentation and information should be submitted to Unrestricted Accounting Main, Taxation Issues staff at tax@unm.edu for approval along with the DPEZ-Direct Pay Approval form. Federal Form 1042-S reporting and/or withholding of 30% may be required. See Treaty Benefits. Note: Treaty Benefits require that the foreign national have a US Taxpayer Identification Number. Other visa types than B or J-1 may not allow for an honorarium payment. Please contact Taxation for further instructions or questions.

  • Non-scholarship Monetary Awards

Payments to Foreign Nationals, including UNM foreign students, for Monetary Awards that are not scholarships, may require 30% foreign tax withholding. If so, the DPEZ payment document should be made for 70% the gross amount of the participant fees. UNM Taxation staff will create a JV to charge the tax. Please contact Taxation Issues staff for assistance.

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Form 1042-S Reporting & Withholding

– Foreign Person's U.S. Source Income Subject to Withholding –: Reports the payments received and taxes withheld and paid to the IRS under the foreign national's name and address..  If tax has been withheld from participant fees, royalties, honoraria, non-scholarship monetary awards or other tax reportable payments or Treaty Benefits have been claimed , the FN will receive Form 1042-S by March 15th of the following year.  This form shows the gross amount paid and the amount of withholding and can be used by the foreign national on their US tax return to file and request a possible refund from the IRS.


SSN (Social Security Number)- The national can apply to the Social Security Administration for an SSN on Form SS-5. Please click here for more information. It takes about 2 weeks to issue the number after all required information has been received. A Canadian Social Insurance Number does not satisfy this requirement.

ITIN (Individual Taxpayer Identification Number) - The national can apply to the IRS for an ITIN on Form W-7. Please click here for more information. It can take 6-8 weeks to issue the number after all required information has been received.


Note:  The Federal Application Forms SS-5 and W-7 should not be submitted to UNM.  The instructions to each of those forms contain information on where they should be submitted.

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Most Common Type of UNM FN Visitors

Visa type B or VWB (B type Visa):


This is a business visa type given to foreign nationals. It is the most common way for an FN to enter the country to give presentations or lectures; and then be paid an honorarium. See Honoraria topic above. FN who enter the US under a B Visa type are not allowed to be employed. They can be reimbursed for their travel and/or living expenses per UBPP 4030- Travel, for the period of time they are allowed to be in the US dated on the oval Homeland Security stamp they receive for this visit to the US. Honoraria may require 30% foreign tax withholding.

Documentation required:


  • FN's address in his/her country of residence
  • a US SSN (Social Security Number ) or ITIN (Individual Taxpayer Identification Number), if claiming Treaty Benefits.
  • Copy of Visa page showing name and picture, or Passport page showing name and picture if from a visa waiver country
  • Copy of the oval Homeland Security stamp dated for this visit to UNM/US
  • B1 and VWB Attestation Form , signed
  • Form W-8BEN, signed by the FN visitor (please send this form to Purchasing Vendor Set up)
  • Form 8233, Taxation Issues staff will prepare this form to be signed in two places by the foreign national, if claiming Treaty Benefits. Their US Federal Individual Taxpayer Identification Number (ITIN) is required for claiming treaty benefits. The IRS must approve 8233s, and they have ten working days to do so. Please plan your payment date around this.

Visa type J1:


This is an exchange student, researcher, or teacher. All J1's have a Form DS-2019, (formerly IAP-66), Certificate of Eligibility for Exchange national, issued by the institution sponsoring the visit in the U.S. J1's sponsored by UNM may be employed by UNM. If UNM is not listed as the "sponsor", then we will need a written approval from the sponsoring entity to pay the FN for services/honoraria. Please include this approval from their sponsor with your request for payment or provide the sponsoring organization contact information to Taxation and we will request this approval. Reimbursement for living expenses for a J-1 whose stay exceeds one year may require 14% foreign tax withholding.

Documentation required:

  • FN's address in his/her country of residence
  • a US SSN (Social Security Number ) or ITIN (Individual Taxpayer Identification Number), if claiming Treaty Benefits.
  • Copy of Visa page showing name and picture, or Passport page showing name and picture if from a visa waiver country
  • Copy of the oval Homeland Security stamp dated for this visit to UNM/US
  • Copy of Form DS-2019 that indicates the sponsoring institution, if UNM is not their sponsor
  • B1 and VWB Attestation Form , signed, if payment is for Honoraria, J-1s must follow the same rules as B Visa types and may require 30% foreign tax withholding..
  • Letter from sponsoring institution authorizing payment (only if FN is not sponsored by UNM), signed by that institution's RO or ARO.
  • Form W-8BEN, signed by the FN visitor (please send this form to Purchasing Vendor Set up)
  • Form 8233, Taxation Issues staff will prepare this form to be signed in two places by the foreign national, if claiming Treaty Benefits. The IRS must approve 8233s, and they have ten working days to do so. Please plan your payment date around this.