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UAB International Scholar and Student Services (ISSS). ISSS is designated as the UAB Department responsible for coordinating UAB’s effort to comply with tax laws applicable to alien individuals, developing procedures to implement this Guide, and determining the tax status of alien individuals. Appointment papers and requisitions shall be evaluated by ISSS to ensure that a tax status determination has been made and entered into UAB's payroll system. These documents shall be signed and forwarded to the UAB Payroll Department by ISSS. ISSS shall verify the work authorization and tax status of alien individuals before payment is made to them.

 ISSS shall distribute Pre-Arrival Packets to UAB Departments containing instructions and forms requesting the information needed by ISSS to make tax status determinations. No payments shall be made to alien individuals by the UAB Payroll Department or UAB Office of Student Financial Aid unless approved by ISSS.

 In determining the tax status of an alien individual, ISSS shall consider the following information, utilize the following forms, and carry out the following responsibilities:

 

    (1) Tax Residency Tests (Appendix 1): Each alien individual shall be evaluated by ISSS in accordance with the requirements of the "Green Card Test" and the "Substantial Presence Test." ISSS shall carry out the following responsibilities:

     
    1. Inform the UAB Payroll Department and the UAB Office of Student Financial Aid whether an alien individual who receives an employee compensation payment, a compensatory payment or a non-compensatory payment referred to in Section 2.3 and 2.4 of this Guide, a student scholarship/fellowship payment, or an independent contractor payment is a nonresident or resident alien for tax purposes; 
    2. Promptly report to the UAB Payroll Department and the UAB Office of Student Financial Aid any change in the nonresident or resident status of an alien individual who receives an employee compensation payment, a compensatory payment or a non-compensatory payment referred to in Section 2.3 and 2.4 of this Guide, a student scholarship/fellowship payment, or an independent contractor payment; 
    3. Facilitate compliance with the UAB Student Tax Policy and the UAB Tax Policy for Postdoctoral Trainees, Fellows, and Visiting Scholars, and applicable tax laws; and 
    4. Inform the UAB Payroll Department and the UAB Office of Student Financial Aid of those tax withholding/payment rules that apply to each resident alien that would be inapplicable to a U.S. citizen (for example, when a tax treaty applies to a resident alien).

 

    1. Tax Treaties and Totalization Agreements in Effect (Appendix 2): The U.S. currently is a party to tax treaties and/or social security totalization agreements with a number of countries.

 

    1. ISSS is responsible for reviewing and determining the application of tax treaties and totalization agreements currently in effect, obtaining information regarding new tax treaties and totalization agreements, and monitoring the expiration or amendment of tax treaties and totalization agreements. 
    2. ISSS is responsible for maintaining the current list of tax treaties and totalization agreements attached to this Guide as Appendix 2.
    1. IRS Form 8233 (Appendix 3): Alien individuals must complete IRS Form 8233 to receive tax treaty benefits as to employee compensation payments, compensatory payments referred to in Section 2.3 of this Guide, or independent contractor payments. However, the current IRS Form 8233 Instructions provide that there is to be no filing with IRS when IRS Form 8233 is completed by certain resident aliens who claim benefits under a tax treaty.

 

    1. The distribution and review of IRS Form 8233 shall be the responsibility of ISSS, and CIP shall oversee the accurate completion of IRS Form 8233. To be effective, IRS Form 8233 must be examined by ISSS and accepted by ISSS on UAB’s behalf. 
    2. An IRS Form 8233 shall not be accepted by ISSS if ISSS has reason to know that any of the facts or assertions on the IRS Form 8233 may be false or that eligibility for treaty benefits cannot be readily determined. 
    3. If ISSS accepts IRS Form 8233 and subsequently finds that any of the facts or assertions contained on the IRS Form 8233 may be false or that eligibility for treaty benefits can no longer be readily determined, then ISSS shall so notify the IRS by letter and shall notify the UAB Payroll Department to discontinued treaty benefits as to any amounts still to be paid. 
    4. If ISSS is notified by IRS that eligibility for treaty benefits is in doubt or that no treaty benefits apply, then treaty benefits shall be unavailable. 
    5. ISSS must promptly forward each completed IRS Form 8233 to IRS within five (5) days of its acceptance by ISSS. 
    6. ISSS shall notify the UAB Payroll Department of the tax treaty benefits to be provided and the date as to which the benefits are effective. After December 31, 1999, treaty benefits generally are effective for payments made at least ten (10) days after the IRS Form 8233 is forwarded to IRS. However, treaty benefits shall not be effective if IRS objects to the IRS Form 8233 (IRS will be considered to have not objected if it does not contact UAB within the aforementioned 10-day period). After expiration of the 10-day period, UAB may rely upon the IRS Form 8233 retroactive to the date of the first payment covered by the certificate. The fact that IRS does not object to the IRS Form 8233 within the 10-day period does not preclude IRS from later questioning its validity. 
    7. An alien individual must file IRS Form 8233 for each calendar year for which he or she seeks to claim tax treaty benefits. Pursuant to final IRS nonresident alien income tax withholding regulations that will become effective on January 1, 2000, the following transition rules shall apply as to the validity of a completed IRS Form 8233: 
    8. If ISSS holds a valid IRS Form 8233 on December 31, 1999, ISSS may treat such IRS Form 8233 as valid until the earlier of its expiration or December 31, 2000 (the IRS Form 8233 shall not be valid after December 31, 2000). 
    9. If ISSS holds a valid IRS Form 8233 on December 31, 1998, ISSS may treat such IRS Form 8233 as valid until the earlier of its expiration or December 31, 1999 (the validity of the IRS Form 8233 cannot be further extended under the preceding transition rule). 
    10. An IRS Form 8233 dated prior to January 1, 1998 that is valid on January 1, 1998 and that expires during 1998 shall remain valid until December 31, 1998 (the validity of the IRS Form 8233 cannot be further extended under either of the preceding transition rules).
    1. IRS Form 1001 (Appendix 4): To claim a tax treaty exemption for an non-compensatory payment referred to in Section 2.4 of this Guide or a student scholarship/fellowship payment referred to in Section 2.5 of this Guide, an alien individual must complete IRS Form 1001.
    1. The distribution and review of IRS Form 1001 shall be the responsibility of ISSS. A completed IRS Form 1001 is not to be filed with IRS, but ISSS shall retain it and notify the UAB Payroll Department of the tax treaty benefits to be provided and the date as of which the benefits are effective. 
    2. IRS Form 1001 will be replaced by a revised IRS Form W-8, which is to be released by IRS pursuant to final IRS nonresident alien income tax withholding regulations. The final regulations will become effective on January 1, 2000. A completed IRS Form W-8 (revised version) that is valid under the final regulations is deemed to satisfy all prior IRS validity requirements. The effective period(s) of the revised IRS Form W-8 will be specified in the instructions of the form. 
    3. A completed IRS Form 1001 generally is effective for a three (3) calendar-year period. However, the following transition rules shall apply as to the validity of the completed IRS Form 1001:

 

    If ISSS holds a valid IRS Form 1001 on December 31, 1999, ISSS may treat such IRS Form 1001 as valid until the earlier of its expiration or December 31, 2000 (the IRS Form 1001 shall not be valid after December 31, 2000).

 

    If ISSS holds a valid IRS Form 1001 on December 31, 1998 ISSS may treat such IRS Form 1001 as valid until the earlier of its expiration or December 31, 1999 (the validity of the IRS Form 1001 cannot be further extended under the preceding transition rule).

 

    An IRS Form 1001 dated prior to January 1, 1998 that is valid on January 1, 1998 and that expires during 1998 shall remain valid until December 31, 1998 (the validity of the IRS Form 1001 cannot be further extended under either of the preceding transition rules).

 

    (5) IRS Form W-8 (Appendix 5): Once notified by a UAB Department, ISSS shall be responsible for the distribution of IRS Form W-8 to nonresident aliens independent contractors.

     
    1. A nonresident alien independent contractor must provide a completed copy of IRS Form W-8 to ISSS to certify his or her foreign status. 
    2. A completed IRS Form W-8 generally is not to be filed with IRS, and CIP shall retain it and notify the UAB Payroll Department of the independent contractor's foreign status.
    3. IRS will release a revised IRS Form W-8 pursuant to final nonresident alien income tax withholding regulations. The final regulations will become effective on January 1, 2000. A completed IRS Form W-8 that is valid under the final regulations is deemed to satisfy all prior IRS validity requirements. The effective period(s) will be specified in the instructions of the revised IRS Form W-8.
       
    4. A completed IRS Form W-8 (current version) generally is effective for a three (3) calendar-year period. However, the following transition rules shall apply as to the validity of the completed IRS Form W-8:

 

    If ISSS holds a valid IRS Form W-8 (current version) on December 31, 1999, ISSS may treat such IRS Form W-8 as valid until the earlier of its expiration or December 31, 2000 (the IRS Form W-8 shall not be valid after December 31, 2000).

 

    If ISSS holds a valid IRS Form W-8 (current version) on December 31, 1998, ISSS may treat such IRS Form W-8 as valid until the earlier of its expiration or December 31, 1999 (the validity of the IRS Form W-8 cannot be further extended under the preceding transition rule).

 

    An IRS Form W-8 (current version) dated prior to January 1, 1998 that is valid on January 1, 1998 and that expires during 1998 shall remain valid until December 31, 1998 (the validity of the IRS Form W-8 cannot be further extended under either of the preceding transition rules).

    (6) IRS Form 8843 (Appendix 6): The current version of IRS Form 8843 and its Instructions may be obtained from IRS by alien individuals who claim to be entitled to exclude days of U.S. presence for purposes of the Substantial Presence Test (see Appendix 1 to this Guide). The Instructions to IRS Form 8843 provide guidance on establishing and retaining nonresident alien status.

    (7) Personal Services Authorization Request Form (Appendix 7): ISSS shall review the PSAR form for all alien individuals and update their tax status. ISSS shall forward the PSAR form and the requisition to the UAB Payroll Department.

    (8) Social Security Administration Form SS-5--SSN (Appendix 8): If an alien individual is receiving (i) an employee compensation payment, (ii) a compensatory payment or an non-compensatory payment referred to in Section 2.3 and 2.4 of this Guide, (iii) a student scholarship/fellowship payment, or (iv) an independent contractor payment, he or she must have a SSN or an ITIN. If an alien individual is eligible for a SSN, it must be obtained before payment may be made. ISSS shall assist alien individuals in filing Form SS-5 to obtain a SSN. Alien individuals who are not eligible to receive a SSN must obtain an ITIN.

    (9) IRS Form W-7--ITIN (Appendix 9): IRS Form W-7 is used to obtain an ITIN. Alien individuals who are not eligible to receive a SSN must obtain an ITIN before payment may be made. ISSS shall assist alien individuals with the application process for obtaining an ITIN. 

    (10) IRS Form W-4 (Appendix 10): IRS Form W-4 is used for the purpose of withholding federal income tax from employee compensation and compensatory payments to postdoctoral trainees, fellows, and visiting scholars. An alien individual who desires to claim a personal withholding allowance must complete IRS Form W-4. ISSS shall forward to UAB Payroll a completed IRS Form W-4 (which generally is not filed with IRS) and shall inform the UAB Payroll Department of the applicable withholding rate and correct number of personal withholding allowances. Unless otherwise provided by federal law and/or an applicable tax treaty, the following special rules shall apply when a nonresident alien completes an IRS Form W-4 and submits it to ISSS: 

    1. Regardless of actual marital status, "Single" must be checked on Line 3;
    2. Only one (1) withholding allowance may be claimed on Line 5; and
    3. "Exempt" withholding status may not be claimed on Line 7 of IRS Form W-4.

      An additional $4.00 per week (or such other amount as required by IRS) must be requested to be withheld on Line 6.

      The mandatory provisions of federal law, federal regulations, or a tax treaty that modify the foregoing rules shall be applied to the extent required.

    (11) INS Form I-94--Admission/Departure Record (Appendix 11): The INS Form I-94 is used by ISSS to document an alien individual’s entrance date, work authorization status, and period of time admitted to the U.S.

    (12) INS Form I-9--Employment Eligibility Verification (Appendix 12): An INS Form I-9 shall be completed by the department for an alien individual if necessary and submitted along with other documentation. ISSS shall review the INS Form I-9. 

    (13) State Income Tax Form A-4 (Appendix 13): A completed State Tax Form A-4 must be submitted to ISSS by each recipient of an employee compensation payment and each recipient of a compensatory payment referred to in Section 2.3 of this Guide. Payment recipients use form A-4 to claim exemption(s) for State Income Tax withholding purposes. If a completed Form A-4 cannot be obtained by ISSS from an employee compensation payment recipient or a compensatory payment recipient, State Income Tax must be withheld on the basis of no exemption(s). IRS Form W-4 cannot be used in place of Form A-4.

    A completed Form A-4 generally is effective until a new or amended Form A-4 is submitted to ISSS. ISSS shall forward to UAB Payroll the completed Form A-4 (which generally is not filed with the Alabama Department of Revenue) and shall notify the UAB Payroll Department of the correct number of withholding exemption(s).

    (14) State Income Tax Form A-4E (Appendix 14): To submit a completed State Income Tax Form A-4E (instead of a State Income Tax Form A-4) to ISSS and qualify for a complete exemption from State Income Tax withholding, the recipient of employee compensation or a compensatory payment referred to in Section 2.3 of this Guide must:

     

    • Be a full-time student (enrolled for five (5) calendar months during the year for a number of hours that amount to full-time enrollment),

    • Be engaged in temporary employment,

    • Expect to earn less than $1,800.00 during the year, and 

    • Expect to owe no State Income Tax for the year.

     

    UAB Payroll shall retain the completed Form A-4E (which generally is not filed with the Alabama Department of Revenue) and shall notify the UAB Payroll Department that the employee compensation recipient or compensatory payment recipient is exempt from State Income Tax withholding.

    1. IRS Publication: The current version of IRS Publications that provide guidance regarding tax withholding and payment may be obtained from IRS. The following is a list of helpful publicaitons:
    1. Publication 519 U.S. Tax Guide for Aliens
    2. Publication 15 Circular E, Employer’s Tax Guide
    3. Publication 15-A Employer’s Supplemental Tax Guide
    4. Publication 17 Your Federal Income Tax for Individuals
    5. Publication 513 Tax Information for Visitors to the United States
    6. Publication 515 Withholding of Tax on Nonresident Aliens and Foreign Corporations
    7. Publication 676 Catalog of Federal Tax Forms
    8. Publication 901 U.S. Tax Treaties
    9. Publication 1187 Specifications for Filing Form 1042S
    10. Publication 1915 Understanding Your IRS Individual Taxpayer Identification Number

    (16) Immigration Status: ISSS shall evaluate (and communicate to the UAB Payroll Department) the Immigration status of each alien individual to determine whether he or she is permitted to work while in the U.S. The expiration date of immigration status shall be reviewed by ISSS.

    (17) Social Security Totalization Agreement Coverage Certificate: Coverage certificates shall be provided to and retained by ISSS in accordance with the procedures set forth in Section 3.2 of this Guide.

     

ISSS’s compliance responsibilities are specified in the foregoing Sections 1.5, 2.2, 2.5, 3.1, 3.2, 3.3, 3.4 and 4.1-4.4 of this Guide. For information regarding the implementation of any aspect of this Guide, contact the following:

 

International Scholar and Student Services

University of Alabama at Birmingham

HUC 250.1400 University Boulevard

1530 15th Street South

Birmingham, AL 35294-1150

(205) 934-3328