Tax

Form 1042-S reports wage payments for foreign nationals who are exempt from U.S. taxation under a tax treaty. This form is also used to report non-wage payments for foreign nationals who are also nonresident aliens. Foreign nationals qualified to receive the 1042-S must attach the form to their tax returns.

Wages subject to U.S. taxation are reported on a W-2 form, not the 1042-S form.

To avoid new employee frustration, it is important that all university staff and faculty members understand and consistently apply the rules surrounding the taxability of recruiting and moving expense reimbursements. This involves clear communication to recruits, both verbally and in our offer letters, of the IRS rules, so that we set appropriate expectations throughout the recruiting and hiring process. Please note that the university does not cover moving expenses for all new or transferring employees; paying for such items is entirely at each unit's and human resource's discretion.

For Human Participants in Research

Sales and use taxes are consumption taxes imposed at the U.S. state and/or local level on the purchase of taxable property or services. Whether an item or service is taxable depends on the laws of the state and local jurisdiction where the goods are delivered or the services are received. Sales tax rates can vary significantly by locality and can range from a few percent to upwards of 10%.

To comply with U.S. Immigration Law regarding payments to foreign visitors, Cornell requires honoraria and expense reimbursement recipients who are visitors from foreign countries and enter the U.S. on a B-1 visa or without a visa to complete the Foreign Visitors Honoraria/Expense Reimbursement Attestation form. In limited circumstances, educational institutions are permitted to pay foreign visitors on B-1 visas. Individuals from waiver countries are also included.

There are two types of federal ID numbers: The U.S. "Social Security Number (SSN)," and the U.S. "Individual Taxpayer Identification Number (ITIN)."

Note: Foreign nationals and units at Cornell also may contact the below offices with specific questions about U.S. Federal ID numbers:

The matrix below identifies the forms Cornell requires to process payments to various categories of foreign visitors.

Note: Reimbursed business expenses paid to foreign nationals do not have unique requirements.

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The matrix below provides guidance on whether Cornell can make a payment to a foreign visitor. Immigration law restricts these types of payments.

Note: If a payment is allowed under the conditions listed below, please see Forms Required for Payments for further instructions.

Article: Social Security and Self-Employment Tax Liability of Foreign Nationals

This article was written by an Issue Specialist, IRS Foreign Payments Branch, Washington, D.C.