All payments for services made to foreign individuals and, in some cases, entities are subject to tax withholding at the time of payment. The tax withholding rate is set by the IRS and the rate can vary based upon payment type and/or tax treaty qualification.
- Default rate is 30% that will have to be withheld and remitted to the IRS
- That withholding can be eliminated or reduced if:
- The individual is considered a US resident alien for tax purposes; or
- Is eligible for a tax treaty benefit; and
- Required Glacier tax documentation is completed
- Reimbursement of travel expenses under the TAMU accountable plan is not considered tax reportable income and the withholding requirements do not apply.
The best practice is to immediately contact Individual Payment and Reimbursement Office in FMO via phone (979) 845-8774 or email firstname.lastname@example.org. This will provide the department with immediate information on how to process and document the payment to the individual or entity. This will also provide direction on if the department must submit the International Visitor Request Form, what visa type the visitor should obtain, and if there is a need to complete a Glacier record.
For detailed payment process and documentation requirements, review Standard Administrative Procedure 21.01.99.M0.01: Payment to Foreign Nationals, Who are not Texas A&M University Employees, for Services Performed in the U.S. and Reimbursement for Travel Expenses.
Departments reserve the right to "gross up" the payment to pay the taxes for the foreign individual or entity. Use the Gross Up Tax Payment Spreadsheet to calculate.