Agencies should review the records of any nonresident alien designated as income code 15 that do not have SSNs or ITINs recorded in PayServ. Agencies should then seek to obtain the employees SSN or ITIN. If no SSN or ITIN can be provided, the agency must update the record so that the employee is taxed at a rate of 30%.
Agencies should review the Visa types for any nonresident alien designated as income code 15 and identify those that have a visa type other than F-1, J-1, M-1 or Q-1. The agency must update the record so that the employees that have a visa type other than F-1, J-1, M-1or Q-1 are taxed at a rate of 30%.
Failure to withhold at a rate of 30% for these employees can compromise New York State’s ability to file tax information electronically with the IRS and may subject the State to fines and penalties. IRS fines, if any, may be passed on to Agencies.
To update the records go to the Employee Federal Tax data panel (Home>Payroll for North America>Employee Pay Data USA>Tax Information>Update Employee Tax Data).
- Insert a row into the panel.
- Click the Non-Resident Alien; Tax Treaty/NR Data radio button in the Special Tax Withholding Status area.
- In the Tax Treaty/NR Data area, enter the original (first) date of entry into the United States and enter the country of residence.
- Select the Treaty ID from the search button equal to “30% W/H RT”
- Enter in Income Code 15 for the scholarship recipient.
- Since the scholarship recipient is not using a treaty, no treaty expiration date is necessary and no other areas need to be marked.
Agencies should use NPAY 752 (Social Security Number Verification Report) to verify the accuracy of employee provided Social Security Numbers.