International Tax Overview
All persons receiving payments from a US source, whether they are US residents or internationals, are subject to US taxation. There are specific regulations and processes required for determining the tax withholding for international persons and various factors come into play in determining the percentage of the tax withholding. In certain situations, tax treaties may exist that exempt a person from US taxation.
GSS is responsible for ensuring Vanderbilt University's compliance with US tax regulations as they pertain to international persons, whether they be visitors, students, scholars or employees.
There are four definitions that are important to the international tax process:
- Non-Resident Alien: this is defined by US immigration laws and generally means any person who is not a US citizen, US national, US resident, asylee, refugee or permanent resident. Non-resident aliens are also called "international persons."
- US Resident: this is defined by US immigration law and generally means any person who is a US citizen, US national, asylee, refugee or permanent resident
- Non-Resident Alien for Tax Purposes: this is defined by US tax regulations and simply means any international person who has not been physcially present in the USA for the amount of time required to warrant treatment as a Resident Alien for Tax Purposes. The substantial presence test and/or the visa status of an international person is used to determine when this categorization ends.
- Resident Alien for Tax Purposes: this is defined by US tax regulations and simply means any international person who has been physcially present in the USA for the amount of time required to warrant treatment as a Resident Alien for Tax Purposes. Resident aliens for tax purposes are taxed in the same manner as US residents. They can use the same filing statuses and claim tax allowances just as a US resident could. In addition, worldwide income must be reported
GSS uses a secure online tax compliance software ("Windstar") to capture the information required to determine the actual tax status of an international person. All international persons who are not US Residents (see definitions above) and who are receiving payments from Vanderbilt University are required to have a Windstar record. Therefore, a Windstar record is required even if an intenational employee, student, scholar or visitor meets the definition of a "Resident Aliens for Tax Purposes."
Obtaining access to Windstar is quick and easy.
- International Visitors Receiving Payment from Vanderbilt: International visitors do not access the Windstar database directly. Instead, the Vanderbilt department hosting the visit simply needs to direct the visitor to complete the online Business Visitor Questionnaire (BVQ). Once the questionnaire is received, ITO will contact the visitor and provide additional immigration guidance,as necessary, and complete the Windstar record on the visitor's behalf.
- International Employee or Student or Scholar Receiving Payment From Vanderbilt: Simply, complete the "Windstar & Placeholder Number" online request form and hit "submit." ITO will send an e-mail with the Windstar access information. The e-mail subject line will be Vanderbilt University Tax Data Request - NRA Tax Analysis.
Use the e-mail login information to open a Windstar record. Complete the online questionnaire and then print the forms that generate at the end of the questionnaire process. After printing the forms, sign and date them, collect photocopies of the required immigration documents and send them to ITO.
It is important to remember to update Windstar every time there is a change of address, or change in immigration documents (visa stamp, I-94, I-20, DS-2019, etc). Updating must continue until the international person leaves Vanderbilt or becomes a US resident.