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Controller's Office > Departments > Tax Services > Tax FAQ's

TEAM MEMBERS:

001. Why is this subject important for FIU?
002. What is FIU’s responsibility for withholding Federal Income Taxes on scholarships or fellowships?
003. Are some students non-taxable even though their financial aid exceeds their tuition and fees?
004. Why does FIU require foreign national students to obtain Social Security Numbers (SSNs) or
Individual Tax Identification Numbers (ITINs)?
005. Why should students worry about obtaining SSNs or ITINs?
006. How do students apply for a SSN or an ITIN?
007. How will the students know when the ITIN is issued?
008. What do students need to do once a SSN or ITIN is received?
009. How will students know the amount to file on their tax returns? Payroll?
010. What are the withholding requirements that apply to nonresidents ?
011. Are some NRAs exempt from federal withholding tax?
012. Are all visa holders exempt from Social Security and Medicare Tax?
013. How will the withholding tax be reported?

Q-001: Why is this subject important for FIU? (Back to Top)

A: The Internal Revenue Service (IRS) announced a major audit compliance effort aimed at colleges and universities. Many universities have paid large bills for unpaid taxes, penalties, and interest.
A scholarship or fellowship paid to a nonresident alien who is temporarily present in the United States may or may not be subject to withholding taxes. First, determine the source of the funds. If the funds are from a foreign country, no withholding is required.
Scholarships, fellowship grants, prizes and awards made by U.S. sources are generally treated as income from sources within the U.S.

Q-002: What is FIU’s responsibility for withholding Federal Income Taxes on scholarships or fellowships? (Back to Top)

A: FIU is responsible to withhold Federal Income taxes at the rate of 14 % on amounts received from U.S. sources by a foreign national present in the U.S. on an “F”, “J”, “M”, or “Q” visa that are part of the scholarship but not for tuition and fees. Room, board, or incidental expenses received under the scholarship are subject to withholding. Tuition, fees, books, supplies, and equipment required for courses of instruction are not subject to Federal income tax.
Payments to nonresident aliens whether taxable or treaty exempt are reportable to the IRS on Forms 1042 and 1042-S.

Q-003: Are some students non-taxable even though their financial aid exceeds their tuition and fees? (Back to Top)

A: Yes, the U.S. has tax treaties with many countries which exempt these students from U.S. income tax. However, the students must file IRS Form W-8BEN with FIU.
You should contact the Controller’s Office if you have any questions about U.S. tax treaties.

Q-004: Why does FIU require foreign national students to obtain Social Security Numbers (SSNs) or Individual Tax Identification Numbers (ITINs)? (Back to Top)

A: FIU is required to withhold and report to the IRS all payments made to nonresident aliens under a tax number. The IRS will not accept assigned student numbers as tax numbers (i.e. 000-02-0000). If the student does not qualify for a SSN, the student is required to obtain an ITIN with the IRS.

Q-005: Why should students worry about obtaining SSNs or ITINs? (Back to Top)

A: The Controller’s Office has instructed the Office of Financial Aid not to disburse any funds to foreign students who do not have SSNs or ITINs. Academic units have also been instructed to notify students of these IRS requirements prior to originating the scholarships and fellowships.
Keep in mind that students need only to apply for either of these numbers and notify the Controller’s Office. It is not necessary that they actually receive these numbers in order for financial aid to be disbursed.

Q-006: How do students apply for a SSN or an ITIN? (Back to Top)

A: Students can contact the Office of International Students at 348-2421 for instructions on how to obtain a SSN.
If a student does not qualify for a SSN, he/she must call the Controller’s Office at 305-348-6764 or 305-348-3729 and schedule an appointment for an IRS ITIN interview.

Q-007: How will the students know when the ITIN is issued? (Back to Top)

A: The Controller’s Office will receive the ITIN cards from the IRS. In turn, we will mail the cards to the students’ local addresses.

Q-008: What do students need to do once a SSN or ITIN is received? (Back to Top)

A: Notify the Controller’s Office and fill out a Change of ID form with the Office of Registration and Records.

Q-009: How will students know the amount to file on their tax returns? (Back to Top)

A: FIU will send to your local address Parts B and C of IRS Form 1042S. This form will list all disbursements and the amount of Federal Income Taxes withheld. It is the students’ responsibility to file IRS Forms 1040NR or 1040NR-EZ with the IRS.
For more information on where and when to file, contact the IRS and obtain IRS Publication 519. Forms and Publications can also be downloaded from the IRS’s website at:
http://www.irs.ustreas.gov/prod/forms_pubs/index.html

Payroll?

The Internal Revenue Service (IRS) has recently begun to scrutinize payments made by colleges and universities to Nonresident Aliens (NRAs). The reporting and withholding rules for payments to NRAs differ significantly from those payments made to US Citizens or Resident Aliens.

Q-010: What are the withholding requirements that apply to nonresidents ? (Back to Top)

A: A nonresident can not claim “EXEMPT” on their W-4. They must claim “single” regardless of actual marital status. Only one allowance is permitted unless they are a resident of Canada, Mexico, Japan or South Korea. IRS requires FIU to deduct an additional $16.00 biweekly.

Q-011: Are some NRAs exempt from federal withholding tax ? (Back to Top)

A: Some F-1 and J-1 visa holders are eligible for exemptions from federal withholding tax because of a tax treaty between the U.S. and their country of residence. They must complete IRS form 8233 accompanied by a written statement. Copies of the social security card , passport, I-20 and/or IAP66 must also be attached. This form is provided by the Controller’s Office . FIU will only allow exemption from withholding 10 days after the IRS receives form 8233 .

Q-012: Are all visa holders exempt from Social Security and Medicare Tax? (Back to Top)

A: With certain exceptions, international students and scholars who are temporarily present in the U.S. on F-1, J-1, M-1 and Q-1 visas are usually exempt from withholding of social security and medicare taxes. This exemption does not apply to spouses and children on F-2, J-2, M-2 and Q-2 visas, nor does this exemption apply to nonresidents who have changed to any immigration status other than F-1, J-1, M-1 or Q-1.

Q-013: How will the withholding tax be reported ? (Back to Top)

A: FIU will report wages paid to a nonresident which are exempt under a tax treaty on forms 1042 and 1042-S. Any additional wages over and above the exempt amount are reported on form W-2. These forms will be sent to the address that is listed on the W-4 card. Addresses must be changed in the Payroll Office.