TAX FAQ’S FOR DEPARTMENTS – STUDENTS

Q: Our department just hired a nonimmigrant student. What do we need to do?

A: Have the student complete Section 1 of Form I-9 no later than their first day of work. Please ask them to come to OIPS within three days of their first day of work to finish the I-9. They must bring original documentation that proves their identity and employment eligibility. Copies are not acceptable. If they are eligible to work for Mason, they will be given a photocopy of the completed I-9 to bring back to the department. They will also be given an OIPS tax packet and asked to make an appointment to meet with the International Tax Coordinator. Do not initiate an electronic approval until you receive the I-9 copy that has OIPS’s pre-printed information in Section 2. From there, proceed as you normally would for any employee in the same position…but keep in mind that the person should not be promised employment beyond the date specified in the upper right corner of the I-9, “An employee authorized to work until xxxx”.

Q: All I have is a copy of the I-9 done at OIPS for one of my international students. Can I initiate an electronic approval for her now, or do I need to wait for copies of tax forms from OIPS as well?

A: Please go ahead and initiate the EA with just the I-9 copy. Especially at the beginning of the semester, it can take a while for someone to get a tax appointment, and we do not want that to delay their paycheck. At the end of their tax appointment, we’ll give the student copies of the tax forms to bring you.

Q: One of our international students was awarded a non-compensatory fellowship. Can I process their fellowship request the same way I process those for U.S. citizens?

A: No. All payments to nonimmigrants, including fellowships, need to be reviewed and approved by the International Tax Coordinator first. Please send the fellowship request, with a copy of the award letter attached, to MSN 4C3. Please do NOT submit the request directly to Accounts Payable. This is absolutely crucial to our institutional tax withholding and reporting compliance efforts.

Q: I submitted a scholarship request to OIPS three weeks ago. The student still doesn’t have the check. What’s the delay?

A: It could be many things. For one thing, Accounts Payable needs about two weeks to process a check once they receive the request from OIPS. If A/P has not received the request from OIPS yet, it is possible that the student has not yet met with the Tax Coordinator to complete required paperwork, or that additional paperwork is required from them. Or, if it is the beginning of the semester, delays are inevitable because we are so busy helping our new students get acclimated.

Q: What can I do to make things go more quickly?

A: It is helpful if your remind scholarship recipients in their award letters that they will need to meet with the Tax Coordinator if they have never done so before. They can call 993-2970 to set up an appointment. Incomplete requests tend to be delayed, so please make sure to attach a copy of the award letter to every scholarship request you submit, even if it’s a continuation of the same scholarship. And please make sure to use the most current version of the fellowship request form, available from the forms menu at http://fiscal.gmu.edu/forms/index.html#AccountsPayable. The form changes occasionally, and old versions should not be used. Also, if a request is sent directly to Accounts Payable instead of to OIPS, there is an additional delay when A/P catches the error and sends the request to OIPS.

Q: I have a Foundation account that I want to use for a scholarship payment to an international student. The person has already met with the Tax Coordinator. What do I do now?

A: The Foundation is not set up to do tax reporting or withholding on payments to foreign nationals. You need to contact the Foundation and arrange to have those funds moved to a Mason account, and then complete a Mason check request instead. As with all payments to foreign nationals, the completed request must be sent to the International Tax Coordinator at MSN 4C3 for review and approval.

Q: U.S. citizens don’t have to pay tax on scholarships. Why do internationals?

A: Actually, U.S. people are subject to tax on “non-qualified” scholarships. Most of them just don’t know it. Scholarship money that is not used for tuition, required books, required equipment, and required fees is supposed to be claimed as income on the payee’s tax return. The difference is that the IRS does not require us to do tax withholding or reporting on scholarships for U.S. grantees, but we DO have to do one or both for many of our internationals.

Q: Are graduate assistantship tuition waivers taxable too?

A: In general, no. As long as the waiver is posted directly to the student’s account and none of it is refunded to the student – AND as long as the student is paid a fair market wage through payroll for their work – the tuition waiver is not even considered income.

Q: I don’t want to bother doing an electronic approval and getting an I-9 done for one of my students. Can’t I just have them work for me and pay them a fellowship through Accounts Payable?

A: DEFINITELY NOT! You also cannot use a student account credit like a tuition waiver or grant to pay someone for services. Compensation for employment must be processed through payroll only. This applies to ALL students, not just internationals.

Q: I submitted a scholarship request for $1,000, but the student told me the check they received was only for $860. What happened?

A: The statutory federal withholding rate for payments to most nonresident aliens is 30%. For nonresidents in F, J, M or Q status, that rate is reduced to 14% on scholarships. If we withheld $140, it means the student is in one of those immigration statuses and is nonresident alien. It also means there was no applicable tax treaty exemption. Your budget will still be charged the full $1,000. The other $140 was sent to the IRS as a withholding credit.

Q: Help! It’s March and our students are asking me for tax advice. What do I tell them?

A: OIPS does at least four tax workshops each spring in March and April to help our international students figure out what forms they need to complete and how to complete them. In most cases, the rules about filing and what forms to file are entirely different than those that apply to U.S. citizens. Please do not attempt to answer tax questions, even simple ones like “do I have to file a tax return?” Please advise your international students to contact OIPS for the tax workshop schedule, which is usually finalized by early March. They can also be referred to OIPS’s general tax information at http://oips.gmu.edu/taxes/index.html

Q: We have a full-time student who we hired on wages. Even though they are full-time, they told me Social Security tax is coming out of their paycheck. What’s wrong?

A: There are different types of wage appointments. If someone’s primary relationship with Mason is as a student, and their employment is incidental to their studies, they should be on a STUDENT wage appointment. (See http://hr.gmu.edu/forms/PositionPrefix.pdf for more information.) If their EA was done for a non-student wage appointment, they will automatically have Social Security tax deducted. Please double-check their EA for accuracy and then contact the International Tax Coordinator to discuss the issue.

Q: Why do internationals have to do tax forms at OIPS? Why can’t we do them here like we do for U.S. people?

A: Tax withholding and reporting rules for internationals who are nonresidents for tax purposes are completely different than for U.S. people. Most of our internationals are nonresidents. The International Tax Coordinator determines each payee’s tax residency based on a detailed immigration history they provide, as well as evaluating potential tax treaty eligibility and possible exemption from Social Security taxes. In addition to making sure Mason is complying with tax laws, the tax appointment also serves to inform nonimmigrants of their U.S. tax responsibilities.

Q: Is there a basic information sheet on payments to internationals?

A: Please see section Hiring Internationals and Inviting a B-1 Visitor to GMU.

Top of the page