Payroll Services - Non-Resident Alien

 

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International Employees and Students - Welcome to UK

Welcome to the University Payroll Service’s Non-Resident Tax Page. This page has been created for both department administrators, and international employees seeking more information on non-resident taxes and UK policies concerning non-residents. We urge you to read our Welcome Letter and become familiarized with our processes. Within this page we have provided links to relevant NRA documents. Feel free to download and/or print any of these documents for your personal/departmental records. If you have further questions please refer to our staff directory to find your Payroll Analyst. We are happy to assist you with any needs or concerns you may have.

 

Things to know and remember

Tax Treaties

Tax treaties are diplomatic agreements made between the United States and various international governments. Each agreement made between the U.S. and a specific foreign government is unique, and includes its own set of rules and guidelines. Not all countries possess a tax treaty with the U.S.; all agreements are updated every tax-calendar year and are subject to the influences of current international policies. Our office will facilitate the tax treaty process for you; however, it is ultimately your responsibility to educate yourself concerning the tax treaties available to you. It is also up to you to be informed on all current eligibility requirements.

  • The tax treaty (if you are eligible) is good for one calendar year. It expires every year on December 31st. If you are eligible, you must come to Payroll Services during the month of December to sign a tax treaty for the following year. There is a 10 day waiting period before we can exempt you from taxes under the tax treaty.  Signing a tax treaty early will ensure you are tax exempt beginning January 1st. Payroll Services is open during the holiday break.
  • Beginning January 1st of each year you will be charged Federal, State and Local taxes unless a tax treaty for the New Year has been signed. These taxes are not refundable. To avoid paying these taxes you must sign a new tax treaty as stated above.
  • We cannot allow you to be exempt under the tax treaty until you receive a permanent Social Security Number (SSN). The Internal Revenue Service (IRS) and The Kentucky Revenue Cabinet (KRC) do not recognize the temporary SSN issued to you by the University of Kentucky. UK’s International Student and Scholar Services website lists the steps you need to follow to apply for a Social Security card. Please remember to send a copy of you permanent SSN card to your Payroll Analyst once received.
  • Federal and State Income taxes withheld may be refunded when you file your tax returns with the IRS and KRC. If you need assistance with tax preparations and filing you can receive assistance by contacting one of the following:
  • College of Law (859) 257-1678 or visit their website to inquire about the Volunteer Income Tax Assistance (VITA) program.
  • UK iCat system - can be accessed through your myUK account or by visiting International Student and Scholar Services (ISSS). This site offers access to tax preparation software without the use of an access code.

Visa Documents

  • We must have current copies of all visa documents on file in Payroll Services. The documents we keep on file are:
  • All changes to any of your documents must be reported to Payroll Services immediately. Failing to do so could result in you owing back taxes on previous payments you have received during the calendar year.
  • Documents can be scanned and emailed directly to your payroll analyst  (preferred method) or other options include campus mail, fax to (859) 257-1143 or hand delivering them to the address below:

340 Peterson Service Building Lexington, KY 40506                                    

  • The IRS and KRC state that non-resident aliens who have not met the substantial presence test must claim single and 0 or 1 exemption on their W4 and K4 forms.
  • All F1 visa holders except those from India and Germany must be in the US for a period of five calendar years before they can claim a higher number of exemptions than stated above. Individuals from India and Germany may claim more than one exemption, with the understanding that they may owe additional federal and state taxes when they file their tax returns with the IRS and KRC.
  • All J1 visa holders except those from India and Germany must be in the US for a period of two calendar years before they can claim a higher number of exemptions than stated above. Individuals from India and Germany may claim more than one exemption, with the understanding that they may owe additional federal and state taxes when they file their tax returns with the IRS and KRC.
  • All H1-B visa holders except those from India and Germany must be in the US for a period of 183 days before they can claim a higher number of exemptions than stated above. Individuals from India and Germany may claim more than one exemption, with the understanding that they may owe additional federal and state taxes when they file their tax returns with the IRS and KRC.

Taxes

  • Federal and State Income taxes and Local tax are deducted from your pay unless you are eligible for and have signed a tax treaty.
  • Non- resident alien employees will be exempt from Social Security and Medicare (FICA Taxes) as outlined below.
  • F1 visa holders are exempt for five calendar years based on date of entry into the U.S.
  • J1 visa holders are exempt for two calendar years based on date of entry into the U.S.
  • Non-resident aliens who are students can be exempt from FICA taxes while they are enrolled half time or greater (six hour or more in the fall and spring semesters and three hours or more during the summer sessions) and are working part time.  The student exemption will take effect once you have exceeded the FICA exemption as outlined above.
  • Fayette County School Tax is automatically exempted from your pay as long as you are on an active visa. If you become a permanent resident you are required to pay this tax. You must notify Payroll Services as soon as you become a permanent resident in order for us to adjust your taxation.  If you fail to notify us of your status change, you will be responsible for paying the school tax and any penalties and interest assed by the local authority effective with the first day you became a permanent resident.
  • NRA taxation is complex, requiring a thorough evaluation of each individual’s unique circumstances and the IRS tax regulations.  Please visit Payroll Services to discuss your situation and how the IRS regulations impact you.