1119.1 - Procedure for Completing Tax Withholding Forms as a Foreign National Scholarship/Fellowship Awardee

Title

University of North Carolina at Chapel Hill Finance Procedure 1119.1 - Procedure for Completing Tax Withholding Forms as a Foreign National Scholarship/Fellowship Awardee

Procedure

Foreign nationals receiving scholarship and fellowship assistance must complete taxation forms. These forms are used in determining the appropriate method of taxation and withholding. To determine which forms should be completed, there are certain rules and regulations that are applied to each foreign national.

Forms and Instructions

Completion of the following forms is required of foreign nationals receiving financial aid awards:

1. UNC Finance Form PR-100, Foreign National Information Form. Completed by foreign nationals to determine whether they are resident or nonresident aliens for tax purposes. This form also provides information to ensure proper tax withholding and reporting.
2. IRS Form W-8BEN, Certificate of Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals). Documents that the nonresident alien is not subject to backup withholding rules, but does not exempt the payee from the 30% (or lower treaty) nonresident withholding rates. It is used to claim an exemption from income tax withholding based on an exemption for scholarship/fellowship grants under tax treaties between the U.S. and the grantee's country of residence.

Exceptions

None.

Related Requirements

External Regulations and Consequences

• Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 519, U.S. Tax Guide for Aliens
• Publication 970, Tax Benefits for Education
• IRS Form W-7, Application for IRS Individual Taxpayer Identification Number
• IRS Form Form W-8 BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)
• IRS Form 1040-NR, U.S. Nonresident Alien Income Tax Return
• Instructions for IRS Form 1040-NR, U.S. Nonresident Alien Income Tax Return
• IRS Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding
• Instructions for IRS Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
• Other forms, instructions, and publications provided by the IRS

University Policies, Standards, and Procedures

• Finance Form 1119.1.1f - Foreign National Information Form (Form PR-100)
• Finance Policy 1116 - Policy on General Overview of Tax Issues for Foreign National Students and Scholars
• Finance Policy 1117 - Policy on Foreign National Employees
• Finance Policy 1119 - Policy on Foreign National Scholarship/Fellowship Awardee
• Finance Policy 1120 - Policy on Tax Status of Foreign Nationals
• Finance Policy 1121 - Policy on Social Security Tax Withholding for Foreign Nationals
• Finance Policy 1122 - Policy on Federal and State Income Tax Withholding for Foreign Nationals

Contact Information

History

Revised:

• August 24, 2009