Nonresident Frequently Asked Payroll Questions

A: Permanent residents (also referred to as lawful permanent residents) are taxed like U.S. citizens; they are not exempt from FICA due to citizenship status (but may still be exempt based on the job type), and do not have a special tax withholding status. They can provide any documents on Page 2 of the Form I-9 that a citizen can provide, but they should still check Box 3 on Page 1, and do not have to complete a Foreign National Information Form.

A: Asylees (those seeking asylum in the U.S.) and refugees are similar to permanent residents; they are not exempt from FICA due to citizenship status, and do not have a special tax withholding status. They can provide any documents on Page 2 of the Form I-9 but should still check Box 4 on Page 1.

A: A resident alien is a non-U.S. citizen who meets the Green Card Test or Substantial Presence Test for the calendar year. Resident aliens are taxed the same as U.S. citizens and have the same forms, filing statuses, and deductions allowed to citizens. Regardless of visa status, if you pass the GCT or SPT, you are considered a resident alien. Resident aliens are subject to FICA taxes.

A: OPT stands for Optional Practical Training, and CPT stands for Curricular Practical Training. Both are extensions to F-1 visas that allow students to continue working for 1-2 years after their initial F-1 visa has expired. Employees on these extensions are still FICA exempt unless they have passed the SPT.

A: At this time, UMS is not equipped to process global payroll. Therefore, if a department wishes to hire a non-U.S. citizen to perform work outside the U.S., they will need to coordinate with a third party company (i.e., Manpower) that can process global payroll to hire and pay this person. They will not be considered an employee of UMS and no hiring paperwork should be submitted to Payroll.

A: If a nonresident alien spouse also receives employment authorization from DHS, they are eligible to work in the U.S.

See more info: H-4 dependent spouse work authorization

A: TN status is granted to citizens of Canada and Mexico through NAFTA (North American Free Trade Agreement).

A: FICA stands for Federal Insurance Contributions Act and is a federal payroll tax that withholds Social Security and Medicare contributions from eligible employees' pay.

F-1 and J-1 visas are FICA exempt under the following conditions per IRS guidelines:

• are employed in on-campus student employment up to 20 hours per week, or off-campus student employment as allowed by USCIS,
• are in practical training student employment on- or off-campus,
• are employed on-campus as a professor, teacher, or researcher.

This exemption does not apply to spouses or children, unless they have their own F-1 or J-1 visa, and does not apply to those who change their nonimmigrant status to a non-exempt or special protected status, or those who become resident aliens for tax purposes.

For other visa types exempt from FICA, click here.

A: Per IRS publication 519, a dual-resident taxpayer is a resident of both the U.S. and another country under each country's tax laws. A dual-status alien is someone who is both a resident alien and a nonresident alien in the same year.

A: NRAs are not allowed to claim exemption from withholding (Line 6), and can only withhold as Single regardless of their actual marital status. NRAs can only claim up to 1 allowance* and must write "Nonresident Alien" or "NRA" above the dotted line on Line 6.

*Residents of Canada, Mexico, and South Korea, or students/business apprentices from India, are allowed to claim more than 1 allowance.

A: The employee should contact Payroll for reimbursement. If Payroll is unable to reimburse the employee, the employee can file a claim by completing IRS Form 843 to request a refund directly from the IRS when filing taxes.

A: They will need to contact an accountant or other tax professional; Payroll cannot provide tax advice.

Note: if an employee is questioning the amount of taxes withheld, they should still contact Payroll.

A: Per IRS publication 519, nonresident aliens cannot file as "married filing jointly" if either spouse was a nonresident alien at any point during the tax year. If a nonresident alien is married to a U.S. citizen or resident, they can choose to be treated as a resident and file jointly. Links to general IRS guidance can be found below:

Nonresident Alien Spouse

Nonresident Alien - Dependents

A: H-1B visa holders are considered resident aliens for tax purposes and therefore are not limited to filing as single; they are also subject to FICA taxes.

A: Generally, yes. If an employee is eligible for a tax treaty, they will need to complete Form 8233 and the associated Additional Statement, and return it to payroll every calendar year they are requesting treaty benefits.

Students should complete this Additional Statement for their home country.

Teachers/researchers should complete this Additional Statement for their home country.

Note: U.S. Social Security Numbers must be included on Form 8233 or it will be rejected as incomplete. Employees should not complete Form 8233 until they have received a U.S. Social Security Number. The original Form 8233 and Additional Statement should be returned to SWS Payroll each year as the original must be mailed to the IRS.

A: Per IRS publication 519, Dependent Personal Services cover compensation paid as wages, salaries, fees, bonuses, commissions, compensatory scholarships, and fellowship income. Independent Personal Services cover income earned as an independent contractor or self-employed individual.

A: A "special letter" is a letter from a University official (typically the campus International Programs office) certifying the type of immigration/visa status the employee holds under sponsorship of the University.

An example of what these letters might include is below:

"This is to certify that ________ is presently holding J-1 immigration status under the sponsorship of the University of Maine Visitor Exchange Program P-1-01822 and to the best of my knowledge is maintaining lawful immigration status. Pursuant to 22 C.F.R. 62.23 (g) (1), I hereby grant permission for ______ to be employed on campus a maximum of 20 hours per week while school is in session, and unlimited hours during annual school vacation breaks for the period of xx/xx/20xx to xx/xx/20xx. This permission is automatically withdrawn if the above named student has the program of study terminated, does not maintain good academic standing, or fails to maintain lawful immigration status."

A: An NRA may apply for a U.S. Social Security Number through Social Security Administration. Copies of U.S. Social Security Cards should be brought, signed, to the campus Payroll or Student Employment office so that the SSN can be on file for tax purposes.

A: If an NRA does not provide all required documents to Payroll in a timely manner, they will be taxed incorrectly which could potentially result in owing the IRS money when filing taxes.