Payments to Non-Resident Aliens

Travel Payment
The University can reimburse travel to a non-resident alien who visits the University of Missouri for a documented business purpose. Expenses submitted are subject to the same rules as travel reimbursements for employees (i.e. receipt requirements, limitations on meal amounts). Reimbursement of travel expenses is not a taxable payment and is not reported to the IRS.

Payment for Services/Honoraria Payments
Payments for services or an honorarium are taxable payments and reported to the IRS.  Individuals performing services or receiving honorariums are treated as consultants/contracts and need to sign personal service contracts. There are many restrictions and limitations on U.S. sourced taxable payments to non-resident aliens (NRAs). The University follows IRS guidelines in making these payments.

In order to determine the individual's US tax status, the University must complete a tax assessment before making the payment to determine whether the taxable payment is allowed, whether the University will have to withhold taxes (the withholding rate is usually 30%) or if the individual is eligible for a tax treaty exemption for any tax owed. The individual needs to complete form UM374, form UM378, and provide copies of his/her passport, all pages of his/her visa, and IAP-66 (if one was issued for this U.S. visit) to Accounts Payable Shared Services.

Payment for services rendered and Honoraria payments to NRAs must be processed through the payroll system. Departments should complete forms UM376 and UM140 and submit to Accounts Payable Shared Services.

Social Security Number/Individual Taxpayer Identification Number (ITIN)
To issue a taxable payment and report the payment to the IRS, the University must have the individual's U.S. Social Security number (SSN) or individual taxpayer identification number (ITIN) on file. Additionally, if there is a tax treaty between the U.S. and the individual's country exempting the payment from tax, we can't grant the treaty exemption unless the individual provides his/her SSN or ITIN. If the individual does not have a SSN or ITIN, he can apply for one at any U.S. IRS office or directly through the mail to the IRS. It takes the IRS a couple of months to issue an ITIN.

Scholarship Payments
Scholarships made to NRA students will be taxable income for any portions of the scholarship greater than the student's educational expenses or any amount provided directly to the student activity fees, information technology fees, and any additional fees required by an academic department. The portion of scholarship determined to be taxable will be withheld at a minimum of 14% unless there is a tax treaty that exempts the scholarship income from withholding. Nonresidents with taxable scholarship income will be contacted by Accounts Payable Shared Services with instructions.

Prize/Award Payments
Prizes and awards are always considered U.S. source income for NRAs, and withholding of U.S. taxes is required at 30% unless a tax treaty applies and the recipient has either a U.S. Social Security Number or Individual Taxpayer Identification Number (ITIN).

The University must complete a tax assessment before making the payment to determine whether the taxable payment is allowed, whether the University will have to withhold taxes (the withholding rate is usually 30%) or if the individual is eligible for a tax treaty exemption for any tax owed. To complete a tax assessment we need information from the individual. The individual needs to complete form UM374 and provide copies of his/her passport, all pages of his/her visa, and I-20 to the Accounts Payable Shared Services.

Prize and award payments to NRAs must be processed through the payroll system. Departments should complete forms UM376 and UM140 and submit to the Accounts Payable Shared Services.