What types of Payments to Non-Resident Aliens are subject to withholding?
• Wages: KSU withholds federal and state taxes using graduated rates. • Qualified Scholarship – Tuition, Fees and Books: No withholding. • Non-Qualified Scholarship (students): (e.g., room, board, stipends, living allowances, travel, prizes, awards, etc.) – KSU withholds federal taxes at 14%. • Fee/Honorarium/Royalty: KSU withholds federal income taxes at 30%. There is no Georgia withholding on these non-wage payments. • Reimbursed Business Expenses for Employees/Short-term Visitors: No withholding. KSU must withhold taxes on all payments to nonresident aliens unless the payment is exempt under the Internal Revenue Code, a tax treaty, or as foreign source income. The Internal Revenue Code establishes the rate of withholding. Will KSU report the income to the IRS? Payments to nonresident aliens are reported to both the international and the IRS on Form 1042S or W-2, but not on Form 1099. The W-2 is issued by January 31; the 1042S by March 15. Payments to resident aliens are reported on
