Types of Payments

General information about types of payments and maybe a definition of what is considered a service.

 

 

Service-Related Payments

 

• Wages & Salary for Employees

  International employees are entitled to compensation for services rendered.  Compensation is generally provided through wages or salary.  In addition, international employees that meet the benefit eligibility are entitled to all benefits offered to domestic employees.

Non-Service Payments & Reimbursements

 

• Honorarium Payments

  An honorarium is a payment given to a professional person for services for which fees are not legally or traditionally required.  An honorarium is not a speaker fee or consultant fee.

   

  If an international visitor will receive an honorarium payment from Oklahoma State University, the recipient must hold a visa that permit them to receive an honorarium.  For example, under current U.S. immigration regulations, persons in H-1B status, cannot receive honoraria.  In addition, an honorarium payment for the benefit of an H-1B recipient cannot be made to the visitor's employer for disbursement to the H-1B visitor.  If any international visitor cannot legally receive an honorarium payment based on visa restrictions, payment cannot be made.

   

  In general, payments made to international visitors are immediately subject to U.S. tax withholding. There are some exceptions to this general rule but international visitors should clearly understand that taxes may have to be deducted from honoraria, speaker fees and travel reimbursements. If an international visitor meets certain requirements, however, they may be able to benefit from tax treaty and other visa status benefits that reduce or exempt them from US taxation.

   

  Oklahoma State University uses GLACIER, a secure nonresident alien tax compliance system to determine our guests U.S. tax residency status. The visitor will need to complete their profile in GLACIER. The visitor will need to print and sign any tax forms that generate and submit them to Tax & Compliance Services along with copies of their immigration documents listed on their GLACIER Tax Summary Report.

• Payments to Conference Participants

  Conference Attendees :

  A conference attendee is a person who attends a conference but is not an invited speaker or panelist.

   

  Travel reimbursements for conference attendees are considered to be taxable income by the U.S. Department of Treasury, Internal Revenue Service (“IRS”). The reimbursement is a “travel grant” or “travel award” and is a non-service payment.

   

  Travel expense reimbursements provided to international conference attendees are subject to U.S. income tax. If income tax withholding is required, Oklahoma State University must withhold the tax from the reimbursement and forward the payment to the IRS. This means that the international conference attendee will not receive a full reimbursement of their travel expenses and travel should be planned with a firm understanding of this. 

   

  The amount of income tax withheld depends on a number of factors including the visa status of the attendee; tax treaties benefits; and the length of physical presence in the USA; it normally ranges from 14% - 30% of the travel reimbursement. 

   

  Conference Speakers :

  A conference speaker is a person who has been invited to present a lecture, discussion, paper, or serve as a panelist, etc., at a conference.

   

  Travel expenses for both domestic and international conference speakers and panelists are considered non-taxable, business expenses by the IRS. Therefore reimbursements for these expenses are not considered to be income to the invited speakers. As such, no tax withholding is required on any partial or full reimbursement of travel related expenses paid to invited speakers.

   

  Honorarium or Speaker Fees :

  Honorarium and/or speaker fees are considered to be taxable income regarless of whether the conference participant is a speaker (or panelist) or attendee.  If the visitor is an international person, Tax & Compliance Services will do a tax analysis before payment is issued to determine the amount of income tax withholding that is required.  Any and all applicable tax treaty benefits will be applied to reduce or eliminate income tax withholding as long as Tax & Compliance Services has a completed GLACIER record and the necessary immigration documents.

• Prizes & Awards to Nonresident Aliens
  IRS regulations require that Nonresident Aliens who are receiving a prize/award are subject to 30% federal withholding on the payment. Prizes/awards are amounts received by an individual primarily in recognition of religious, charitable, scientific, educational, artistic, literary or civic achievement or received as a result of entering a contest. Generally, tax treaty provisions are not available to exempt a prize/award from the 30% tax withholding. The individual will need to create a profile in GLACIER and they will receive a 1042S tax reporting form by March 15 of the next calendar year reflecting the amount award, taxes withheld, and amount netted.
• Reimbursement of Travel Expenses
  All international visitors can receive travel reimbursements.  However, whether those payments are business expenses or taxable income depends on the visa category of the visitor and the services performed.  There may also be restrictions on what activities an international visitor may engage in while in the USA.  If a travel expense is not taxable, GLACIER completion is not required.
• Royalties

  A royalty is a financial proceed paid to a contributor out of the proceeds that result from a sale or performance of that individual’s work.  It is also a share in the proceeds paid to an inventor for the right to use the invention.

   

  If an international person will be receiving royalty payments from Oklahoma State University, the department administrator must request GLACIER access so that a GLACIER record can be created.  The GLACIER access request can be made on our website. 

• Stipend Payments

  The word 'stipend' is used in a variety of ways in the Oklahoma State community. The word stipend simply means a fixed and regular payment or allowance. A service free stipend is a form of payment whereby the person is not required to do any kind of work (past, present, or future) as a condition of receiving the payment.  Service free stipends are given as a means of assisting an individual to pursue academic study or research.   From a tax perspective, this type of payment to a nonresident alien is considered a scholarship subject to 14% tax with one exception.  If you have a U.S. issued tax ID number (ITIN) AND you are from a country that has a tax treaty with the U.S. that allows a tax exemption on scholarship payments, you will not be subject to taxation.  However, this income is reported on a 1042-S year-end form for you in the following calendar year in February.  To receive this exemption, you must have completed and signed a W-8BEN form via your GLACIER record with your U.S. issued tax ID number (ITIN) and provide this to Tax & Compliance Services.

   

  Your department representative will request GLACIER access on your behalf.  You will receive two emails, one from the International Tax office and the other from GLACIER that will provide instructions on how to complete your GLACIER record and where to send your required documents to.  It is important to complete this step in order to avoid delaying your payment. 

• Student Travel Reimbursement
  Travel reimbursements are considered taxable Travel Grants by the IRS and are taxable to the international student at 14% if there is no identifiable business purpose or benefit to Oklahoma State University. If your travel reimbursement involves you presenting your research or speaking about your research, this is considered a benefit to Oklahoma State University and will not be a taxable event to the student.  The student must add this information to their expense report summary to expedite their report approval. If the travel is for the student’s personal, educational benefit, it is considered taxable scholarship income.  This categorization also includes student recruitment travel reimbursements.  If the student recruit is not in the U.S. in an F or J status, the travel is considered OTHER taxable income by the IRS, and is taxable at 30%. 
• Subject Participant Payments

  All Subject participant payments are subject to 30% withholding for international persons. Tax treaty exemptions do not apply to Subject Participant payments. 

   

  International persons receiving these payments must create a GLACIER record or update their GLACIER record by adding Other relationship and Prize/Award/Other income type if this is not currently added to their record. In both cases, you must provide your signed Glacier record documents. Persons with new records must also provide copies of their immigration documents listed on their Glacier Tax Summary. The International Tax office recognizes that many participants in clinical trials or research studies will receive payments for $30.00 or less.  Under IRS regulations, no matter how small the payment, if the payment is subject to taxation, Oklahoma State is required to withhold taxes.