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Key Terms and Definitions

1042S    

IRS form showing international person's US source income and tax withholding.  Issued no later than March 15th of every year (for the previous calendar year). All international persons with nonwage payments and taxes or wages that were exempt from tax withholding due to a tax treaty will receive this form.

FICA

FICA (Federal Insurance Contributions Act) tax is actually two separate taxes:   Social Security Tax and Medicare Tax. Together, the two taxes are referred to as FICA tax.

Form 8233          

IRS form used, by international persons, to request application of tax treaty exemption or tax treaty benefits, as applicable.

Windstar

Web-based database used by VISIT to to collect immigration information needed for all international personnel tax files.  Information captured determines whether an international person is a Nonresident Alien or Resident Alien for Tax Purposes. 

I-9 Form

USCIS form completed by all domestic and international employees requiring them to show proof of employment eligibility in the USA. 

I-94, I-94W         

White or green document issued by CBP to every international person arriving in the USA.  I-94 shows visa status and date of expiration of visa status. 

Immigration Law and IRS Regulations

If the person is not a U.S. Citizen or permanent resident, two sets of laws must be taken into consideration.

  • Immigration law determines what an individual in each specific visa type can do, whether the person can be employed and whether or not payments can be made to that individual. 
  • IRS regulations determine whether permissible payments to an international person are potentially taxable and /or reportable, and how the payments should be categorized (e.g. salary, wages, independent contractor fees, stipends, scholarship, fellowship, etc.). 

IRS                      

Internal Revenue Service (IRS) is the agency in the U.S. Department of the Treasury responsible for enforcing the internal revenue laws.

ITIN        

Individual Taxpayer Identification Number; Issued by the IRS to individuals not eligible for a SSN who have tax filing requirements or who wish to file for a tax refund.  

Nonresident Alien For Tax Purposes

A person who is not a United States citizen, refugee, asylee or permanent resident, and has not met the substantial presence test.

Permanent Resident

A permanent resident (PR) is a person who has been granted permission to remain in the United States indefinitely, so long as they continue to meet PR qualifications or do not elect to relinquish the status. These individuals are also known as 'green card' holders.

Resident Alien For Tax Purposes

A person who is not a United States citizen or permanent resident, but has met the substantial presence test.

Substantial Presence Test

A mathematical test used to determine residency in the United States for tax purposes.

SS-5                    

Application for a Social Security Card

SSA                    

Social Security Administration; agency responsible for issuing SSNs

SSN                    

Social Security Number

US Citizen

A U.S. Citizen is a person born in the United States or who meets specific criteria related to birth and parents. A U.S. Citizen may be a person who is 'naturalized' by meeting certain criteria.

Visa status        

Visa classifications used by the Dept. of Homeland Security that define the reason for the person coming to the US, the nature of any services, for whom they can be performed and what remuneration can be received.  

W-2       

Employer Wage and Tax Statement issued to persons with wages no later than January 31st of each year for use in filing a tax return.

W-4       

Employees Withholding Allowance Certificate; provided to employer to determine amount of tax to withhold from wages.    (Special rules for nonresident aliens)

W-7       

Application for Taxpayer Identification Number; persons receiving payments but who do not qualify for a SSN must apply for an ITIN.

W-8BEN            

Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding; most often used here for persons claiming tax treaty benefits for stipends.  May be used by a foreign company to claim tax treaty benefits for services performed in the U.S.

W-8ECI

Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States. Used by foreign companies to claim an exemption from withholding based on the fact they are registered to do business in the U.S. and are required to file a tax return based on business profits.

W-9       

Request for Taxpayer Identification Number and  Certification; required of certain persons receiving wages who have tax treaty benefits.

WB/WT              

International persons entering the USA under the Visa Waiver Program. 

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