• Indicate only "Single" marital status (regardless of actual marital status).
  
• Claim only one withholding allowance, unless a resident of Canada, Mexico, India, Japan, or South Korea, or is a U.S. national. A U.S. national is an individual who is either a citizen of American Samoa, or a Northern Mariana Islander who chooses to become a U.S. national.
  
• Unless the compensation will be exempt under an income tax treaty, an additional tax of $4.00 per week must be withheld. If the pay period is biweekly, request that $8.00 be withheld. If the pay period is monthly, request that an additional tax of $17.00 be withheld. This offsets the standard deduction incorporated in the graduated withholding tables and standard payroll calculation formulas.
  
• Do not claim "exempt" withholding status.
  
• May not claim the Earned Income Credit unless married to a U.S. citizen and elects to be taxed as a resident alien for the entire year.

These provisions are found in Publication 15 (Circular E, Employer's Tax Guide). Publication 15 is specially referenced in the Internal Revenue Regulations as the authority for wage withholding; therefore, the $4.00 per week is legally required. Treasury Regulation 31.3402(b)-1, Percentage Method Of Withholding states:

"With respect to wages paid after April 30, 1975, the amount of tax to be deducted and withheld under the percentage method of withholding shall be determined under the applicable percentage method withholding table contained in Circular E (Employer's Tax Guide) according to the instructions contained therein."

Nonresident aliens who refuse to file a proper W-4 as required by IRS regulations should have federal income taxes withheld at the rates pertaining to single status, zero exemptions allowed. Refer to Treasury Regulation Sec.31.3402(f)(2)-1(e).

i. Canada, Mexico and American Samoa

Residents of Canada, Mexico and American Samoa are subject to the same withholding requirements as other nonresident aliens --- graduated withholding on wages and 30 percent withholding (or lower treaty rate). However, they are not restricted to a single personal withholding allowance; they may claim personal allowances under the same provisions that apply to U.S. citizens.

ii. India

Students from India who are eligible for the benefits of Article 21(2) of the United States-India Income Tax Treaty can claim additional withholding allowances for the standard deduction and their spouses. They can claim an additional withholding allowance for each dependent not admitted to the United States on F-2, J-2, or M-2 visas. Also, they do not have to request additional withholding.

iii. Japan and Korea

Residents of Japan or Korea may claim withholding allowances for themselves and a spouse and any dependent children who live with them in the United States for some portion of the year.

B. Independent Contractors

Payments to nonresident alien independent contractors are processed through the Voucher Audit System. The nonresident alien independent contractor should be entered into the vendor system following the specific input standards in the SAMAS manual.

• Completed Foreign National Information Form
  
• One original and one copy of the completed IRS Form 8233
• Copy of both sides of the contractor's I-94 Arrival and Departure Record
  
• Copy of contractor's U.S. VISA from passport
  
• Copy of contractor's I-20 or IAP66

• Completed Foreign National Information Form
  
• One original and one copy of the completed IRS Form 8233 if a personal exemption is claimed

• Copy of both sides of the contractor's I-94 "Arrival and Departure Record"
  
• Copy of contractor's U.S. VISA from passport
  
• Copy of contractor's I-20 or IAP66

Example.

C. Scholarship and Fellowship Grants

Nonresident alien scholarship/fellowships and per diem payments under the Mutual Security Act of 1954, as amended are processed through the Payroll Processing System. Nonresident alien individuals that receive fellowships or scholarship payments (cash and noncash) must:

• Complete a Foreign National Information Form
  
• Complete a W-4 Card
  
• Complete a Reduction or Exemption From Withholding, Form DBF-BP-5
  
• IRS Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholdinge.

i. Cash Payments

Normally, nonresident alien fellowship/scholarship payments are taxed at either 14% or 0%. Please contact the Bureau of State Payrolls for payment processing procedures if the criteria for reduced withholding under section 1441(b) is not met requiring taxation of 30% (refer to Section VII of manual).
Nonresident alien cash fellowship/scholarship payments must be submitted to the Bureau of State Payrolls on a payroll requisition file (F0001). The file specifications for a F0001 should be followed using the appropriate earnings code. The record layout and other pertinent information is found in the Payroll Preparation Manual, Volume VI, Section 1.
Status Object

* Provide control totals on the diskette for these fields

Control Totals

Include with the diskette a hard copy of the information contained on the diskette (with record count and control totals) and a journal transfer to transfer the withholding to the Bureau of State Payrolls using SAMAS account code: 44-74-2-101001-44100000-00-000600-00.

If the university pays the withholding for the individual the payment must be "grossed up."

Example. A nonresident alien's fellowship/scholarship includes a dorm fee waiver of $1000. The university elects to pay the required withholding from a discretionary fund. The gross amount of the fellowship/scholarship is calculated as:

$1000 / [1- {.14}] = $1162.80

Therefore, the withholding in this example is $162.80, the net amount is $1000. Please note that the gross-up option may not be available to students that receive athletic scholarships. Adding to the scholarship amount could be construed as a violation of National Collegiate Athletic Association (NCAA) financial aid rules, which prohibit grant amounts in excess of tuition, fees, room, board and books.

iii. Per Diem Payments Under Mutual Security Act of 1954, As Amended

Payments made to a nonresident alien fellowship/scholarship recipient for "per diem for subsistence" made in connection with the Mutual Security Act of 1954, as amended are to be submitted to the Bureau of State Payrolls following the file specifications F0001. The file organization and other pertinent information are found in the Payroll Preparation Manual, Volume VI, Section 1.