WESTERN MICHIGAN UNIVERSITY

1. WESTERN MICHIGAN UNIVERSITY PAYMENTS TO FOREIGN NATIONALS AUGUST 21, 2019

2. PAYMENTS TO FOREIGN NATIONALS Why are payments to foreign nationals so complex? Contract Export control Immigration Tax All of these bodies of law must be complied with when paying foreign nationals

3. PAYMENTS TO FOREIGN NATIONALS • EXPORT CONTROL LAWS • “Export control” is a catch all term that covers how the U.S. prevents the unintended export of goods, information or services from the United States to foreign countries, persons, or entities. • Before inviting a foreign national, submit the online international visitor form to verify that the visitor can legally be invited: • https://wmich.edu/international/invitingintlvisitors

4. IMMIGRATION LAWS • It is unlawful for WMU to pay foreign nationals who are not authorized to work or perform services for payment in the U.S. • Note that reimbursement or direct payment of travel expenses is considered payment the same as an honorarium or independent contractor payment • Departments are required to ascertain visa status of a visitor before making any monetary commitment. Otherwise, you are committing to payment that may not be paid.

5. IMMIGRATION LAWS • An exception to the immigration rules exists for payments to certain foreign visitors under what is referred to as the “honorarium exception” or the 9-5-6 rule. • The exception is available to visitors in B-1, B-2 or Visa Waiver Program status who: • Are performing usual academic activities • The duration of the activity is nine days or less • The visitor has not been paid or reimbursed by more than five other institutions during the past six months (including the current visit to WMU) • The payment cannot be contracted for (no I/C or invoice)

6. Honorarium vs. Independent Contract (I/C) • An honorarium is a gift given in appreciation for a service such as a lecture • An honorarium cannot be contracted for: • If the service provider will be invoicing WMU for the service, you are not paying an honorarium. Paying an invoice is not payment of a token of appreciation. An I/C is needed to pay for such services.

7. TAX RAMIFICATIONS OF PAYMENTS • All honorarium and independent contractor payments to foreign nationals are subject to 30% U.S. tax withholding absent a valid tax treaty claim. • Note that visitors providing a service to WMU must have a U.S. social security or ITIN in order to claim a tax treaty exemption from withholding. • Form 8233 must be completed and signed by the visitor. The tax treaty section number and explanation of why the exemption applies are required on the form. After the form is accepted by WMU, a copy is required to be mailed to the IRS and there is a 10 day waiting period before payment can be made.

8. NEW FORMS AND GUIDANCE AVAILABLE ON THE CORPORATE REPORTING & TAXATION WEBSITE • A new payment form – to be completed for payments, reimbursements, etc. to foreign nationals. The form includes a sign off section for the tax office. • A new payment matrix showing what types of payments can be made under various visa statuses. • New checklists for various payment types to foreign nationals. • List of documentation required for payment based on visa status.

9. Where do I find the new checklists and materials? • https://wmich.edu/businessandfinance/forms • Will there be any training on the new materials? • Yes, plans are being made for small group trainings in September. • Please send an email to: • julie.carroll@wmich.edu for more information.