Resident alien

Why didn't I receive a 1042-S tax reporting document for tax treaty benefits claimed last year, even though my fellowship/stipend/scholarship was not taxed?

Non-service fellowship income, in the absence of tax treaty benefits, is also exempt from tax withholding when paid to a resident alien. First, confirm your residency status, and only if you were a nonresident alien, last year, should you look into updating your mailing address and requesting a reprint of the document.

If Harvard has classified me as a resident alien, can I choose to still be treated as a nonresident alien by claiming a closer connection to my home country?

Harvard will continue to treat you as a U.S. resident alien, even if you're able to claim a closer connection to another country. You'll have to establish the closer connection through the IRS when filing your tax returns.

IRS commentary on FICA tax liability

As a resident alien, how can I report 1042-S income and/or claim tax treaty benefits on my tax return?

Please refer to the detailed instructions in IRS Publication 519, section 9 (Tax Treaty Benefits), under Some Typical Tax Treaty Benefits/Resident Aliens/Students, Apprentices, Trainees, Teachers, Professors, and Researchers Who Became Resident Aliens

Why didn’t I receive a 1042-S when I received a scholarship, stipend, fellowship, or grant?

If the Nonresident Alien Tax Office has classified you as a resident alien for tax purposes (a status based on your visa type and U.S. visa history), then you will not be receiving a 1042-S. As a resident alien, you are responsible for independently reporting your income to the U.S. tax authorities by referring to your personal pay records.

Alternatively, if your scholarship was less than your tuition and related expenses, it would have been reported on the 1098-T, not the 1042-S. Please contact the...

Should I receive any tax reporting documents?

If you had no U.S.-source funding, you will not receive any tax reporting documents. It is possible to receive more than one type of tax reporting document, if you received more than one type of funding from a U.S. source (wages plus a fellowship, for example). The type of document you might receive depends on the type of funding you received. If the only funding you received from Harvard was a scholarship that was applied directly to your term bill (1098-T), you will not receive any tax reporting documents. If you had no U.S. source funding, you will not receive any tax reporting...

Why am I paying taxes when I’ve submitted all the required forms to claim tax treaty benefits?

This could be due to one or more of the following factors:

Sprintax Calculus has indicated that you're eligible for tax exemption on a dollar limit for the tax year, however, administrative/technical restrictions at Harvard prevent us from granting treaty benefits when there's a dollar limit.
On average, it takes around 1 month to process tax classification/treaty forms, and your submission is still in the queue. Once it has been processed, however, your earnings will be tax exempt and we can...

Making Payments to Foreign Individuals

Use these guidelines to better understand payments to foreign individuals.

Harvard is required to follow:

Internal Revenue Service (IRS) regulations that govern the taxation of payments to nonresident aliens, which differ from those that govern payments to U.S. citizens and resident aliens; and
Regulations set by U.S. Citizenship and Immigration Services (USCIS) when making payments to certain foreign scholars and students

These regulations, which can be complicated, determine the tax status and proper...

Independent Contractor Payments

Whether an individual is an actual independent contractor, and not an employee, has important implications for the policies, procedures and payment processing requirements that should be taken into consideration.

For IRS information, see IRS Publication 1779 Independent Contractor or Employee
Independent Contractor policy

...

Employees Working Abroad

Use these guidelines to better understand tax obligations of Harvard employees working outside the United States. For general information on tax obligations of all Harvard payment recipients outside the U.S., please see U.S. or Foreign-Source Income.

Topics covered below:

U.S. Citizens and Resident Aliens Working Outside the United States
Nonresident Aliens Working Outside the United States
...

Determining Tax Residency Status

Use these guidelines to determine the tax residency of a foreign individual present in the US:

A nonresident alien for tax purposes (as defined by the IRS):

Does not have a green card (Permanent Residence card), and
Does not satisfy the substantial presence test
- The substantial presence test is a calculation used by the Internal...

Social Security and Medicare Tax (FICA)

Social Security and Medicare taxes, or "FICA" tax (approx. 7.5% of gross income), are collected by Harvard University but administered independently by the U.S. Social Security Administration. Non-student U.S. citizens, lawful permanent residents, and resident aliens (as designated by the Sprintax Calculus tax compliance system) are subject to FICA taxes on salary and wages earned as an employee.

It may be possible to refund FICA taxes incorrectly withheld by the University:

To determine if FICA taxes were incorrectly withheld in the current...

U.S. or Foreign-Source Income

Nonresident aliens for tax purposes and foreign entities, unlike U.S. persons and U.S entities, are only subject to tax withholding on income that is considered U.S.-sourced and not foreign-sourced. In order for Harvard to consider income as foreign sourced, the foreign payee must have attested to their foreign status by submitting a completed W-8. Instructions for form W-8BEN for foreign individuals is accessible directly from the IRS website.

Harvard is required to indicate the “location of...

Salary/Wages

Employment compensation, or a salary, is taxed at marginal graduated rates, meaning income earned over certain levels set by the U.S. tax authorities is taxed at progressively higher rates. Please see the section on income tax withholding tables in IRS Publication 15 to get an idea of how your salary will be taxed by Harvard.

If eligible for tax treaty benefits, both nonresident aliens and resident aliens can claim exemption from tax withholding by submitting completed tax...

Stipend, Scholarship, Fellowship, or Grant

Stipends, scholarships, fellowships, and grants are meant to support personal scholarly activities. These income payments are often grouped together, for tax purposes, as "non-service fellowship" income. This may include also health insurance paid on behalf of non-employees and "reimbursements" for travel or other expenses that have not been deemed genuine University business expenses (i.e. in direct support of University research or scholarship).

Correctly distinguishing between income and business expense reimbursements has important ramifications for tax withholding and...