Overview
Georgia Tech has responsibility to follow a general rule from the U.S. Internal Revenue Service (IRS) regarding payments to foreign nationals. Section 1441 of the Internal Revenue Code states that Georgia Tech, like all withholding agents in the U.S., is required to withhold federal income tax from ALL payments made to or on behalf of a nonresident alien. Other regulations then require that Georgia Tech report all such payments to the IRS.
Therefore, Georgia Tech must review all data related to the immigration status and purpose of their stay of all payment recipients at Georgia Tech who are not U.S. citizens or lawful permanent residents. Determining tax residency and tax treaty eligibility is a difficult task at best. That is why Georgia Tech has purchased tax compliance software called GLACIER.
Software
GLACIER is an online tax compliance system that collects information, makes tax residency and treaty determinations, manages paperwork, maintains data, and files reporting statements with the IRS. Foreign national employees of GT, or receiving any other form of payment from GT, are required to create a GLACIER account.
GLACIER Tax Prep is on-line tax return preparation software created specifically for international students and scholars. The GLACIER Tax Prep software will help you navigate U.S. federal tax forms, residency status, tax treaties, exemptions, and deductions. GLACIER Tax Prep is provided for GT international students and scholars by the Office of International Education and can be accessed via employees’ GLACIER accounts.
Tax Treaties
Foreign national employees of Georgia Tech may qualify for a full or partial exemption from federal tax withholding if a tax treaty exists between the U.S .and the foreign national’s country of tax residence. The GLACIER tax compliance software will assist with determining eligibility for a tax treaty benefit and provide all of the necessary paperwork. In many cases, this paperwork must be renewed on an annual basis
- IRS Publication 901 (includes list of tax treaty countries)
Social Security Number
A social security number is a permanent nine-digit identification number/card issued by the Social Security Administration (SSA). It is used primarily to identify participants in the federal government's Social Security Program but because it is unique to each person the number is now used by many other public and private organizations. Anyone employed in the United States must obtain a social security number.
General Tax Compliance Questions
Why Is My Tax Status Important?
What is the Difference between a Nonresident Alien and a Resident Alien?
How Long Will I Be a Nonresident Alien?
How Will I Be Taxed as a Nonresident Alien (NRA) on Payments From U.S. Sources?
Can I Be Exempt From Tax Withholding?
What If I Do Not Submit My Forms and Documents?
For additional tax compliance questions, please refer to International Student & Scholar Tax FAQs.
Why Is My Tax Status Important?
In order for Georgia Tech to comply with U.S. tax laws, it is necessary for GT to determine your U.S. tax residency status. The IRS has developed a test of days present in the U.S. and rules as to which foreign nationals are subject to that test: Substantial Presence Test. GT’s reporting requirements to the IRS are determined by the payee’s tax residency.
What is the Difference between a Nonresident Alien and a Resident Alien?
A nonresident alien for tax purposes is taxed only on her U.S. based income and has tax rates specific to nonresidents. A resident alien for tax purposes is subject to U.S. taxation on her worldwide income, i.e. you are taxed in the same manner as a U. S. citizen.
How Long Will I Be a Nonresident Alien?
F-1 and J-1 student visa status holders are generally nonresident aliens for tax purposes for five calendar years. J-1 nonstudent visa status holders have a more complicated test that looks at a period of two years out of six. J-1 nonstudents visa status holders often become resident aliens for tax purposes in their third calendar year in the U.S. Other nonimmigrant aliens will often become resident aliens for tax purposes in less than one year’s time. The U.S. tax system is based on a calendar year period (January 1 – December 31). In most cases, when your U.S. residency status for tax purposes changes, you will become a resident alien for tax purposes retroactive to the first day of the calendar year during which your status changed, i.e. 1 January.
How Will I Be Taxed as a Nonresident Alien (NRA) on Payments From U.S. Sources?
As a Nonresident Alien for Tax Purposes without a tax treaty, U.S. tax law requires that you be taxed in the following manner:
- Employment
Employees are subject to an NRA graduated withholding table on your wages and required by tax code to file a form W-4 (Employee’s Withholding Allowance Certificate) as a single person with one allowance—regardless of your marital status.
- Scholarships/Fellowships
Awards for mandatory tuition and fees are not reportable and not taxable.
Awards for room and board and other expenses are reportable and have 14% withheld for taxes for F, J, Q, and M visa status holders and 30% for other visa status holders.
Can I Be Exempt From Tax Withholding?
Approximately 63 countries have tax treaties with the United States and some of these treaties allow payments of one type or another to international students and/or scholars to be exempt from U.S. taxation. The tax compliance software, GLACIER will determine whether or not you qualify for a tax treaty exemption, and will provide you with the necessary information and forms to take advantage of your tax treaty benefits. Often, this paperwork must be renewed on an annual basis, so be sure to renew the paperwork at the appropriate time each year.
What If I Do Not Submit My Forms and Documents?
If you do not complete the information in GLACIER and submit the required forms and documents, the maximum amount of tax will be withheld from all payments made to you.
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