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INTERNATIONAL EMPLOYEES’ TAXES. Internal Revenue Service - Barbara Dawkins Foreign National Tax Unit (UB) – Claudia Samulski Amanda Maines New York State - Suzanne Reusch. TAX VOCABULARY. IRS = Internal Revenue Service

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international employees taxes

INTERNATIONAL EMPLOYEES’ TAXES

Internal Revenue Service - Barbara Dawkins

Foreign National Tax Unit (UB) – Claudia Samulski Amanda Maines

New York State - Suzanne Reusch

tax vocabulary
TAX VOCABULARY
  • IRS = Internal Revenue Service
  • Income Tax Return = form which all employees send to the IRS each year
    • to file an income tax return = to send it to the IRS
  • Income: money earned from a job, bank interest or investments
  • Wages or compensation: money earned only from a job
u s taxation
U.S. TAXATION
  • There are two types of income tax that employees in the U.S. pay:
    • Federal (U.S.) tax
    • State (New York) tax
tax vocabulary4
TAX VOCABULARY
  • To withhold income taxes (tax withholding)
    • to subtract income taxes directly from the employee’s paycheck
  • Exempt from paying income tax (tax exemption)
    • excused from paying income tax due to an income tax treaty
foreign national information worksheet
FOREIGN NATIONAL INFORMATION WORKSHEET
  • All foreign employees should complete this Worksheet.
  • Gives us the information that we need to determine how to withhold income taxes
  • A new Worksheet needs to be completed each year that you are employed at UB.

http://www.business.buffalo.edu/hrs/foreign_national_worksheet.pdf

income tax treaties
INCOME TAX TREATIES
  • Exist between the United States and 47 foreign countries
    • 32 apply to students
  • Either reduce or exempt income tax on a portion of earnings
  • Apply only to federal and state tax
  • Based on country of foreign residence not citizenship
differences in tax treaties
DIFFERENCES IN TAX TREATIES
  • Most income tax treaties exempt earnings from income taxes while others reduce income taxes.
  • Exempt dollar limits = the amount of earnings that can be exempt from income tax withholding
    • Wages earned over the exempt dollar limit will have income tax withheld.
  • Exempt time limit = the number of years a foreign employee can use the income tax treaty
    • Begins from date of arrival in the United States
differences in tax treaties13
DIFFERENCES IN TAX TREATIES
  • Retroactive clauses
    • If the exempt dollar or time limit is exceeded, exempt wages may be taxed back to the first exempt dollar earned.
  • To find out more about a specific income tax treaty, see the Student Income Tax Treaties handout.
to claim a tax treaty exemption
TO CLAIM A TAX TREATY EXEMPTION
  • Complete required forms
    • Foreign National Information Worksheet
    • Form 8233
    • Revenue Procedure
  • Submit forms to Foreign National Tax Unit
  • Forms can be accessed from our websites
    • Refer to the Resource Sheet provided in your packet.
contact the foreign national tax unit
CONTACT THE FOREIGN NATIONAL TAX UNIT
  • If you have any questions, please contact us.
  • Contact information is on the Resource Sheet.
u s tax exemption withholding forms
U. S. TAX EXEMPTION & WITHHOLDING FORMS
  • FORM 8233 = “Exemption from Withholding on Compensation based on a Tax Treaty”
  • REVENUE PROCEDURE = Required statement that is attached to Form 8233 verifying your exempt status
  • W-4 = U.S. Income Tax Withholding form
u s taxation internal revenue service
U.S. TAXATION INTERNAL REVENUE SERVICE

Form 8233

A nonresident alien individual should use this form to claim a tax treaty exemption from withholding on some or all compensation.

u s taxation form 8233 part i
U.S. TaxationForm 8233 Part I

Youra Name

400-00-0000

A Street

Bejing

China

1 University Lane

Amherst, New York 14228

F-1 19983361828005

China

899503662

January 10, 2003

January 2006

x

u s taxation form 8233 part ii
U.S. Taxation Form 8233 Part II

Teaching assistantship (income code 19)

$5000

U.S./China Tax Treaty, article 20(c)

all

People’s Republic of China

revenue procedure 87 8 87 9 or 93 22
Revenue Procedure87-8, 87-9 OR 93-22

Required Statement

  • The Revenue Procedures require Students, Teachers and Researchers to attach a statement to Form 8233.
u s taxation28
U.S. TAXATION
  • To summarize, Form 8233 is used to claim exemption from income taxes because of a tax treaty.
  • If there is no tax treaty between your country and the U.S. OR you are not eligible to exempt your earnings from income tax, then you must fill out Form W-4.
u s taxation tax withholding
U.S. TAXATIONTAX WITHHOLDING
  • Salaries, Wages, or any other pay for personal services (work) paid to a nonresident alien employee is subject to the graduated withholding method. This is the same method used for U.S. citizens and residents.
u s taxation form w 433
U.S. Taxation Form W-4

Name

x

Youra

1 University Lane

Amherst, NY 14228

400 00 0000

1

15.30

Youra Name

1/20/03

fica withholding federal insurance contributions act
FICA WITHHOLDING(Federal Insurance Contributions Act)
  • Deductions appear as:
    • - Social Security tax
    • - Medicare tax
  • Nonresident alien J -1 and F-1 students and scholars engaged in authorized employmentare exempt.(Examples: campus work, practical training and economic hardship employment)
  • H-1B and TN visa holders are not exempt.
new york state taxes
NEW YORK STATE TAXES
  • New York State complies with ALL Federal (United States) Tax treaties in accordance with the Internal Revenue Codes.
new york state taxes36
NEW YORK STATE TAXES
  • For New York State Taxes, you will give to your new employer either:IT2104 –Employee’s Withholding Allowance Certificate ORIT2104E – Certificate of exemption from Withholding
new york state taxes which form to use
NEW YORK STATE TAXESWhich form to use?
  • IT2104 – Employee’s Withholding Allowance Certificate Use this form if:1) You intend to earn MORE than $7500 in gross income in New York State OR2) You can be claimed on another individual’s federal income tax return and you intend to earnMORE than $3000 in gross income in New York State.
new york state taxes form it 2104
New York State Taxes Form IT-2104

Youra Name

400-00-0000

x

1 University Lane

Amherst, New York 14228

1

0

0

slide39
NEW YORK STATE TAXES Which form to use?IT2104E – Certificate of Exemption from WithholdingUse this form if:1) You intend to earn LESS than $7500 in gross income in New York State OR2) You can be claimed on another individuals federal tax return and you intend to earnLESS than $3000 in gross income in New York State.
new york state taxes form it 2104 e
New York State Taxes Form IT-2104-E

Youra Name

400-00-0000

X

1 University Lane

05-30-81

Amherst, New York 14228

x

x

x

x

Youra Name

1/21/03

contact information
CONTACT INFORMATION
  • Internal Revenue Service
    • 1-800-829-1040
    • http://www.irs.gov
  • New York State
    • 1-800-225-5829
    • http://www.tax.state.ny.us/pit
  • Foreign National Tax Unit (UB)
    • (716) 645-5000 ext. 1286 or 1025
    • http://ubbusiness.buffalo.edu

Click on “Employee.” Scroll down to “Tax Facts.” Either choose “RF” or “State.” Click on “Foreign National Tax Unit.”

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