1122.1 - University of North Carolina at Chapel Hill Procedure on Determining Federal and State Income Tax Withholding for Foreign Nationals

Introduction

Purpose

The University will utilize all state and federal withholding laws in determining taxability for Foreign Nationals. Once the tax status is established, foreign nationals will complete applicable forms.

Related Requirements

External Regulations and Consequences

The Wage and Tax Statement, Form W-2, issued to employees with taxable income, and Form 1042-S, issued to employees with nontaxable income, are used to complete the following forms:

• U.S. Nonresident Income Tax Return Form 1040NR and
• N.C. Individual Income Tax Return Form D-400

Other Forms, Instructions, and Publications for Foreign Nationals from the Internal Revenue Service (IRS):

• Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Corporations
• Publication 519, U.S. Tax Guide for Aliens
• Publication 970, Scholarships and Fellowships
• Form W-7, Application for Individual Taxpayer Identification Number
• Form 1040NR, U.S. Nonresident Alien Income Tax Return
• Instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return
• Instructions for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons and
• 1042-S, Foreign Person's U.S. Source Income Subject to Withholding
• Other publications, forms, and instructions provided by the IRS

University Policies, Standards, and Procedures

• Finance Policy 1116 – University of North Carolina at Chapel Hill Policy on General Overview of Tax Issues for Foreign National Students and Scholars
• Finance Policy 1117 – University of North Carolina at Chapel Hill Policy on Foreign National Employees
• Finance Policy 1119 – University of North Carolina at Chapel Hill Policy on Foreign National Scholarship/Fellowship Awardee
• Finance Policy 1120 – University of North Carolina at Chapel Hill Policy on Tax Status of Foreign Nationals
• Finance Policy 1121 – University of North Carolina at Chapel Hill Policy on Social Security Tax Withholding for Foreign Nationals