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Division Director

Paul Whitfield

Assistant Directors

Rachael Lieblick

Mark Merry

Accounting and Auditing
200 East Gaines Street
Tallahassee, FL 32399-0318

(850) 413-5510
March 20, 1995



A new section of the Bureau of State Payrolls' Payroll Preparation Manual, Volume V, Section 15, has been distributed to current holders of the Manual in each agency as reflected on our mailing list. The new section of the Manual covers the processing procedures and Federal employment tax and information return reporting requirements applicable to payments to aliens. An alien is a person who is not a citizen of the United States.

The procedures in the Manual make reference to the requirement that each agency review the relationship it has with persons who provide services to the State to determine if the person is an employee or independent contractor. Information on making this determination was covered in Comptroller's Memorandum No. 7 (1988-89). The procedures in the Manual also require that the agency determine if the person providing the services is an alien, and if the person is an alien, whether the alien is a resident alien or nonresident alien. The relationship the agency has with the person and the person's residency status will dictate whether payments to the person are to be processed through the Voucher Audit System or through the Payroll System, including the applicability of Federal employment taxes, foreign country tax treaties and exemptions. The procedures and documentation requirements applicable to making these determinations, processing payments and computing and handling applicable employment taxes are covered in the Manual.

Inasmuch as this new section of the Manual covers procedures applicable to processing payments through the Voucher Audit System as well as through the Payroll System, agencies should make this section of the Manual available to fiscal staff involved in processing payment through the Voucher Audit System.

Please direct questions regarding taxation, foreign country tax treaties and exemptions to Patti Calhoun, Bureau of State Payrolls, at 488-7762, Suncom 278-7762. Questions regarding contracts and processing payments through the Voucher Audit System are to be directed to the applicable Audit Administrator in the Bureau of Auditing at 488-4094, Suncom 278-4094.