Nonresident Taxation - F-1 Visa

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F-1 students are not authorized for self-employment, unless they (a) have an OPT EAD and using it for their fields of study or (b) have a hardship-based EAD. Also, (c) if the services are related to their sponsoring institution’s academic program and if it has been communicated and approved by the sponsoring institution prior to the engagement, a payment could be made to the sponsoring institution, who then will pay the F-1 students.

Therefore, our Office strongly discourages departments from engaging any activities with F-1 students who are sponsored by another institution, unless one of the three exceptions discussed above applies.

When making payments to F-1 students with OPT or hardship-based EAD’s, following documents are required:

    • FNIS data sheet - completed, signed, and dated (FNIS);
    • Valid passport - including but not limited to the front bio page and the page with corresponding U.S. entry stamp;
    • Visa stamp;
    • I-94 - both front and back;
    • I-20; and
    • Guest Speaker Form or Independent Contractor Agreement Form (WEB)– completed, signed, and dated with W-8BEN attached.

A remuneration paid to or on behalf of an NRA is subject to a 30 percent withholding tax on the gross amount and will be reported on Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding. NRA’s in F status may need to obtain a SSN or an ITIN in order to take advantage of any available treaty benefits, unless they already have a SSN or an ITIN issued.

When the services are related to their sponsoring institution’s academic program and it has been communicated and approved by the sponsoring institution prior to the engagement, a payment will be made to the sponsoring institution:

  • Prior written agreement with the sponsoring institution; and
  • Request for Payment or Purchase Requisition Worksheet with W-9 attached.

Since it is a payment to the sponsoring institutions, the sponsoring entities are responsible for meeting any withholding requirements associated with the payments to nonresident aliens.

 

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