International Visitor Payments
This guide is intended to outline processes and procedures for making payments and reimbursements to international visitors as part of a University business. This guide will outline the circumstances for allowable payments and describe the associated tax implications. Depending on an international visitor’s immigration and work authorization status, he or she may be prohibited from receiving payments and reimbursements of expenses or from having payments made on his/her behalf by the University.
International Visitor (Nonresident Alien): A non-employee that is neither a US citizen nor a resident alien for tax purposes. See IRS explanation for Resident Alien.
US Sourced vs. International Sourced Income: Income is pay for personal services performed such as honoraria and fee for service as well as royalties, rents and software license fees. The source of the income is the place where the vendor performs the service or earns the income for which they are being compensated. US sourced income is income for services performed in the United States, US royalties, rental of personal property located in the US and licensing fees for software used in the US. international sourced income is income for services performed outside the United States, non US royalties, rental of personal property located outside the US and licensing fee for software used outside the US. Only US Sourced income is reported and subject to tax by the IRS depending on the availability of a tax treaty. international Sourced income is neither reportable nor subject to tax by the IRS.
Honoraria: A compensation payment made without legal obligation on the payer’s part to a person for services conducted in a volunteer capacity, or for services for which fees are not traditionally required. An honorarium is provided as a token of appreciation for participation in a usual academic activity that benefits the University, including lecturing, teaching, consulting, conducting research, attending meetings, symposia or seminars, or otherwise sharing knowledge. Click here for more information regarding honoraria.
Fee for Service: A compensation payment for providing a service, such as a speaking engagement, consulting or any type of service where the independent contractor will participate only if they are compensated.
Reimbursement: A non-compensation payment made for expenses incurred and paid by a person or entity other than the University incurred as part of University business. For example, airfare, lodging and meals. These travel expenses must be reimbursed using the Non-Employee Visitor/Guest Travel Reimbursement form.
Social Security Number (SSN): A nine-digit number issued by the Social Security Administration to track benefits and used by the Internal Revenue Service (IRS) to record earnings information.
Individual Taxpayer Identification Number (ITIN): A nine-digit number issued by the IRS used by the IRS to record earnings information.
Honoraria, Fee for Services and Reimbursements for International Visitors Guidelines
Payments of honoraria, fee for service, other earned income and reimbursements can be made based on the visa status of the individual and are subject to the visa constraints and the IRS tax liabilities. Please be aware that just by completing the following forms does not lead to an automatic exemption from withholding or eligibility for payment.
Whenever possible, departments should make travel and lodging arrangements directly with third-party vendors (i.e. airlines or hotels) for their international visitors using the Department P-Card.
An expense reimbursement made directly to an international visitor will not be considered as income and will not require tax withholding or reporting, provided that the following exist:
- The International’s visit benefits the University.
- All expenses are supported with receipts.
- To process any payment to an international individual, unless they live in the US and/or have a US bank account, Clemson will need to request the individual be invited to register as a supplier and they will have to complete the supplier registration process which allows Clemson to collect information to process a wire payment in addition to the possible international tax documentation.
Documentation and Processing
Non-Employee Visitor/Guest Travel Reimbursement form process
Honoraria or Fee for Services (Income)
Where the honorarium, fee for service or other income is earned, whether here in the US (US Sourced Income) or in a international country (international Sourced Income), is important to determine how to report the payment.
US Source Income
Honoraria or fees for services earned in the US are subject to complex visa constraints and IRS liabilities. US sourced income is subject to 30% IRS withholding unless a treaty is applicable between the international visitor's country of residence and United States for a reduced tax withholding rate and/or exemption. To claim treaty benefits, the visitor must have a SSN or an ITIN. Departments that want to compensate a international visitor for work done here in the US must initiate a request to have the individual invited to register as a supplier.
Once registered, a PO must be placed (cannot utilize Direct Expenditure process for Honorarium/gift/award payment.)