UC Santa Barbara Policy 5150
Policies
Issuing Unit: Administrative Services Date: September 1, 1982
PAYMENT TO ALIENS
I. PURPOSE AND SCOPE:
This procedure provides guidelines for assuring that payments of
aliens are in accordance with Federal Tax Laws. See Policy 5145.
II. REFERENCE:
A. UCSB Policies Manual, Policy 5145, Payment to Aliens.
III. PROCEDURE:
A. Employees:
1. General:
All alien employees, including student employees, are
required to complete and sign Statement of Citizenship
Status (Attachment A). When the hiring form is received in
the Accounting Office, the department will be notified to
send the employee to Accounting to complete the required
form. At that time the employee will be informed of
his/her tax withholding category. If the employee
qualifies for exemption from withholding under a tax
treaty (see Policy 5145, paragraph II.E.), the appropriate
form will be completed at that time.
2. Resident Aliens:
Resident aliens employed by the University are subject to
tax withholding on the same basis as U.S. Citizens.
Internal Revenue Service Form 1078, Certificate of Alien
Claiming Residence in the United States should be
completed and signed by the alien only if he/she is
certain of his/her status as a resident alien.
3. Nonresident Aliens:
Nonresident aliens employed by the University are taxed at
the same rates as single U.S. Citizens. These employees
are allowed only one personal exemption, regardless of
their actual marital status or the number of dependents
they may have either in the United States or abroad.
4. Salary Advances:
Salary advances to newly employed aliens may be approved
by The Vice Chancellor or his designee up to maximum of
$2,000 each. The purpose of such advances is to assist
these individuals in covering the cost of their
subsistence and transportation enroute to the place of
University employment when currency restrictions prohibit
their taking sufficient monies out of their own country.
The advance will be authorized with the understanding that
the total advanced will be repaid within six months of
arrival or within the period of appointment, whichever is
the shorter period.
5. Sailing Permits:
When an alien employee, including a student employee is
ready to depart from the United States, he/she must obtain
a tax clearance from the Internal Revenue Service, which
is called a Sailing Permit. About three to four weeks
before the alien is to leave the University, the
department should contact the Accounting Office for a
certification to request a Sailing Permit from the local
Internal Revenue Service Office (Attachment E).
B. Payments by Vendor Check:
For one-time honoraria, consulting fees or other payments which
are ordinarily initiated by departments on Form 5, Request for
Issuance of Check, information is needed in order to determine
the proper Federal withholding tax to be deducted from the
payment. Travel expenses will be reimbursed in accordance with
Procedure 5170.
1. Statement of Citizen Status:
If the recipient is a U.S. Citizen with a foreign address,
please indicate "U.S. Citizen" on Form 5 in "Alien" block.
If the recipient is an alien, fill out Statement of
Citizenship Status, Attachment A. For employment and
fellowships, the sections Taxpayer identification, Job
Title, Department, Length of Employment should be
completed.
If the alien qualifies for exemption from withholding
under a tax treaty, the appropriate completed form
(Attachment C or D) should be sent to the Accounting
Office.
2. Resident Aliens:
Resident aliens receiving honoraria, consulting fees, or
other stipends are not subject to withholding. Internal
Revenue Service Form 1078, Certificate of Alien Claiming
Residence in the United States, should be completed in the
Accounting Office and signed by the alien if he/she is
certain of his/her status as a resident alien.
3. Nonresident Aliens:
Nonresident aliens receiving honoraria, consulting fees,
or other stipends are subject to withholding at the rate
of 30 percent after allowing one personal exemption of
$2.74 per day unless exempt under a reciprocal tax treaty.
IV. ATTACHMENTS:
A. Statement of Citizenship Status
B. Certification of Tax Exemption for Teaching
C. Certification of Tax Exemption for Personal Services
D. Sailing Permit
For questions or comments regarding the format of the above information, please contact webcontact@ucsbuxa.ucsb.edu.
Last Modified By: HMW, 5/21/97
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