Paying Nonresident Employees
The University of Texas at San Antonio has two options for payment to short-term foreign national visitors/nonresident aliens (NRA).
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International Faculty and Scholar Services
Paying Nonresident Alien Contractors/Payees
Eligibility for a nonresident alien (foreign national) to receive compensation from an U.S. source depends on the person's visa status. Compensation, including honorarium, for professional or contractor services include, but are not limited to, the following services or payments:
- Flat payments for living expenses
- Live performances
- Participation in scientific, educational, professional or business conventions, conferences or seminars
- Other services on a short-term, contract basis
- Reimbursement of lost income and other payments
- Business expense reimbursements
International scholars and visitors who receive any of these payments are generally subject to 30% federal tax withholding, unless the amounts are either exempt under the terms of a tax treaty, subject to a lower, or reduced tax rate under the treaty, or exempt from tax under the Internal Revenue Code.
- Lodging and travel expenses paid on a short-term basis are not subject to tax withholding and reporting as long as they are substantiated business expenses following IRS "accountable plan rules" used to reimburse employee business expenses. For more information, ask UTSA Payroll Services.
- Per diem amounts paid for meals and incidentals may be taxable. Keep all receipts and please check with the UTSA Payroll Office to determine tax liability.
All U.S. source payments, except those exempt from tax under the Internal Revenue Code (such as substantiated business expenses) made to or on behalf of, nonresident alien contractors must be reported on IRS Form 1042-S.
Note: Compensation paid for services performed by nonresident aliens outside the United States is not subject to 30% withholding, and not reported to IRS.
Visa waiver countries are Andorra, Australia, Austria, Belgium, Brunei, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Liechtenstein, Luxembourg, Monaco, the Netherlands, New Zealand, Norway, San Marino, Slovenia, Spain, Sweden, Switzerland, and the United Kingdom. The United Kingdom refers only to British citizens who have the unrestricted right of permanent abode in the United Kingdom (England, Scotland, Wales, Northern Ireland, the Channel Islands and the Isle of Man). It does not refer to British overseas citizens, British dependent territories' citizens, or citizens of British Commonwealth countries.
Visa holders and payment
F-1: F-1 visas are for students who are pursuing a full course of study toward a specific educational objective. They are allowed to work on-campus at the institution that issued their I-20. They are allowed to work off-campus in limited cases with special authorization. They are limited to 20 hours of work per week during the academic year and 40 hours per week during vacation periods. (Also see F-1 OPT.)
F-1 OPT : F-1 Optional Practical Training (OPT) allows an F-1 student on an I-20 from any school to have employment related to his or her field of study. OPT authorization is issued by the U.S. Citizenship and Immigration Services only and is in the form of an Employment Authorization Document (EAD). F-1s with "post-completion" OPT are allowed to work full-time. F-1s with "pre-completion" OPT may have restricted hours. Please consult with the International Student Services in the Office of International Programs for further information.
F-2: F-2 visa holders are the dependents (spouse and unmarried minor children) of F-1 students. F-2s are not allowed to engage in employment or business activities of any kind. They are not allowed to receive any type of compensation for services.
J-1: A J-1 visa is an exchange visitor visa that may be used for short-term as well as long-term visits. It allows employment incidental to the visit and may be used for payment of honoraria and reimbursement of expenses with prior consent and approval from the sponsoring institution.
Some J-1 visitors will become subject to a two-year home residency requirement, which would prevent them from obtaining legal permanent residence in the U.S., or an employment-based visa (H-1 or L-1) until the visitor returns home for two years. This two-year rule arises where the exchange visitor has received direct government funding, or has a career specialty designated by the visitor's home government as a critical specialty needed by the home country for its well being or continued development. Foreign medical graduates receiving medical training in the U.S. are also subject to the two-year rule. A J-1 exchange visitor must obtain a form DS-2019 from his or her J-1 sponsor and then visit a United States Embassy or Consulate to apply for a J-1 entry visa in his or her passport. Canadian citizens are not required to obtain an entry visa or carry a passport.
The institution listed as sponsor on the DS-2019 is authorized to make payments to the J-1 visitor and may also designate other sources of funding. Other sources must be disclosed in advance and written on the DS-2019 as additional sources of funding.
J-2: A J-2 visa holder is the dependent (spouse or child -- child must be under age 21) of a J-1. J-2s can apply for work permission from the Immigration Service. Once they have the permission, in the form of an Employment Authorization Document (EAD), they may accept honoraria. The EAD card is only valid until it expires or the J-1’s DS-2019 expires, whichever comes first. There is no limit on the number of hours a J-2 with work permission can work.
H-1B: The H-1B is a Temporary Specialty Worker visa. It is an employer-sponsored visa, which may only be obtained through an employer's petition to the U.S. Citizenship and Immigration Services.
International Faculty & Scholar Services handles H-1B petitions for UTSA. The H-1B may be used for temporary or tenure-track positions. The H-1B is employer-specific, meaning the employee may only be employed by the employer that filed the petition. H-1B status may last up to 6 years. An individual with H-1B status can work only for the petitioning employer, but may receive expense reimbursement from other sources. H-1B employees may not accept honorarium payments from outside sources.
H-4: The H-4 is a dependent visa for spouses and unmarried children under the age of 21 who accompany an H-1B or other H-visa employee. The H-4 does not provide for any employment. An H-4 visa holder can accept reimbursement of expenses.
TN: The TN arises from the North American Free Trade Act (NAFTA). The TN is an employment visa that allows Canadian and Mexican citizens (but not Canadian or Mexican permanent residents) to be employed in the U.S. in certain occupations listed in the NAFTA treaty.
The TN employee is admitted for temporary employment of a maximum of one year's duration. Renewals of TN status are possible. International Faculty & Scholar Services will assist UTSA departments who wish to invite a Canadian or Mexican citizen for temporary employment at the university. TN status is not appropriate for tenured or tenure-track positions, due to the visa’s temporary nature.
Canadian and Mexican citizens acquire TN status by presenting to an immigration officer at the point of entry a job offer letter for a listed occupation, along with any required credentials for the job (diploma, licenses, etc.). Upon admission in TN status by an Immigration and Customs Enforcement officer, Canadian and Mexican citizens may work for only the employer whose job offer the employee presented to said official. A TN employee may accept expense reimbursement from other sources.
TD: The TD is the dependent visa for spouses and unmarried children under age 21 who accompany a TN employee. The TD does not provide for any employment, but a TD visa holder may accept expense reimbursement.
O-1: The O-1 is for individuals of "extraordinary ability or achievement." UTSA may hire faculty or researchers with very strong academic records and credentials who may not be able to use an H-1B or J-1 visa for various reasons.
The O-1 is appropriate for temporary positions but may be problematic for permanent positions. The O-1 process requires the employer to petition the USCIS before hiring the employee. The O-1 visa holder may work only for the petitioning employer, but may accept expense reimbursement from other sources.
O-3: The O-3 is for spouses and unmarried children under age 21 who accompany an O-1 employee. The O-3 does not provide for any employment, but an O-3 visa holder may accept expense reimbursement.