Background: The IRS requires income to reported annually in the calendar year payments are originally disbursed by withholding agents. Harvard must also comply with government regulations that require timely payments to be issued for services rendered, which is codified within Harvard Procurement and Payroll Policies.
Potential Tax Hazard- If Harvard has already issued an annual tax document (i.e., 1099 or 1042S) to a payee, a redeposit request to cancel a check can render a tax document incorrect, requiring Harvard to send the payee an...
In certain situations, where University and department policies and budgets allow, administrators may wish to “gross up” an income payment to a recipient. The desired outcome may be intended to achieve a specific “net amount”, accounting for required tax withholdings. Gross up payments incur additional expense to the requesting department’s budget, which can be significant.
Reportable income payments processed to or for the benefit of individuals, are reportable for “gross up” amounts paid. Depending on income type and payment circumstances, tax withholding rates can vary...
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.
There are 3 forms Harvard is able to accept from a foreign entity to be set-up to receive payments as a supplier (W-8 BEN-E, W-8 EXP, or W-8 ECI). Information on the various forms can be found on the Foreign Entities and W-8 Forms page. We are unable to advise on which form should be used, as this is a individual business decision a supplier must make based on their legal structure, and in consultation with a professional tax advisor if necessary.
As a withholding agent, Harvard University is required by the IRS to collect the appropriate W-8 form from any foreign entity to establish the entity's foreign status. These forms are a direct result of government regulations associated with the Foreign Account Tax Compliance Act (FATCA). In addition to the payment details provided when transactions are being processed to a foreign entity, these...
If you received U.S.-source income, you are required to file an annual tax return (such as 1040NR,1040NR-EZ, 1040, 1040EZ, etc.) with:
the Internal Revenue Service (IRS)
the Commonwealth of Massachusetts (in some cases)
If you were in the U.S. last year on anything other than a B visa or visa waiver, and did not receive any U.S. sourced income, you may only need to file a simple tax statement (8843) with the U.S. federal tax authority (IRS). For more information, see ...
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.
Please note: In January 2024, Harvard launched Sprintax Calculus as our tax determination software for international payees (non-U.S. individuals and entities). This software replaced Glacier. Visit our Sprintax Calculus page for more information and resources.
Per IRS regulations, tax treaties must be renewed annually for employees that will continue their work for Harvard in the U.S., into the next calendar year 2024. To meet these requirements and claim a tax treaty exemption for 2024 (if previously...
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...
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...