Tax classification

The process of determining the residency status and tax withholding rate for foreign nationals. 

How should I answer questions in Calculus if I have no U.S. presence in the current calendar year but expect payments from Harvard for US activities that occurred in a prior year?

If you were unable to complete Sprintax Calculus before the end of the calendar year that corresponds to your recent visit to Harvard, and you are expecting payments relating to that visit, then you will need to indicate at least 1 day present in the U.S. this calendar year to complete your Sprintax Calculus profile.

 

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Sprintax Calculus

Effective January 2024, Harvard launched Sprintax Calculus as our new tax determination software for international payees (non-U.S. individuals and entities). 

Notes on Two-factor Authentication

  • Two-factor authentication is required to use Sprintax Calculus's E-Sign function.
  • Once you enable two-factor authentication, the same method...
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What is the “Location of Activity” when processing a payment in Accounts Payable, and why is it important to include?

  • Harvard is required to indicate the “location of activity”, particularly when paying income to foreign individuals and foreign entities, to comply with IRS tax withholding and reporting regulations. A clear indication of the location of the activity (such as the country) is necessary on all supporting documentation for the payment to be correctly classified for tax purposes. This applies to both service and non-service income.
  • Generally, the location of...
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What if I have to pay someone before they arrive in the U.S?.

You can set up an international payee ahead of time only if the individual is receiving a travel grant payment, which may be necessary to arrange their travel to Harvard. This process can be initiated through B2P by selecting the Advance Travel Grant "ADVTR" visa option, which will result in the maximum tax withholding of 30% until the individual completes their Sprintax Calculus profile. The Calculus process can be started shortly before their arrival to the U.S., but the required I-94...

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What if I don't know what my relationship to the University or income type are?

You should select the best option, which a few points might help reveal:

  • If you've already received a paycheck, from which FICA tax (MED and OASDI) was withheld, then you're either an employee, faculty member, teaching assistant, or student worker receiving compensation/salary/wages. 
  • If your payment was not subject to FICA tax, and is a fellowship, stipend, or scholarship, then you should select student, fellow, or fellowship recipient as your relationship to the University. You can then select any of the associated...
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Who should contact the International Payee Tax Compliance office?

All foreign nationals expecting to receive income from the University, including fellowships, stipends, compensation, and other payments for service, who have not received the link to the Sprintax Calculus online tax determination program and/or have tax-related questions. Please note that if the only “payments” from the University received by an undergraduate or graduate student are scholarship amounts applied directly to the student’s term bill, the student will not have tax withheld or be issued a tax reporting document, so does not have to contact this office. For more...

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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...

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At what rate should my income be taxed?

In most cases, taxes are automatically withheld from your pay. Such tax withholding may include Federal, State and Social Security/Medicare taxes that can range from 14-30% of your total income. The amount of tax withheld depends on the type of income you receive and your tax status in the United States. Most incoming F and J visa holders are considered non-residents (students for the first five years in the United States and J-1 scholars for the first two years). But there are of course other visa types, and exceptions, so it’s important that the Nonresident Alien Tax Office classifies...

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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...
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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...

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Tax Withholding and Payments to Foreign Individuals

Payments from Harvard University may be subject to tax withholding and/ or reporting in accordance with regulations strictly enforced by the U.S. tax and immigration authorities. As a withholding agent, Harvard University is required to collect the appropriate IRS certification form (W-8BEN or 8233) from nonresident aliens to establish their foreign status. Sprintax Calculus will generate the necessary IRS forms when paying a foreign supplier that has U.S. presence. In addition to the payment and reporting details, IRS certification form W-8BEN informs what statutory tax withholding or...

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