Financial Administration

Personal Services Payments - Attachment 10

REPORTING AND WITHHOLDING REQUIREMENTS

Reporting Requirements

  1. Form 1099

    A Form 1099 is required when an individual receives nonemployee income of $600 or more from services, rents, prizes, awards, and research subject payments in any combination, or income of $10 or more from royalties. These payments are accumulated by calendar year for the entire UW System and reported to the Internal Revenue Service and the Wisconsin Department of Revenue by the UW Processing Center.

  2. Form 1042S

    Each processing center will report all payments for services to nonresident aliens and applicable withholding on IRS Form 1042S. These payments are reported to the Internal Revenue Services by the UW Processing Center.


Withholding Requirements

  1. Non-U.S. Resident Aliens

    The appropriate tax will be withheld based on IRS Section 1441 and existing tax treaties. Withholding is required at 30% (less prorated personal exemption amount) on payments for services unless:

    1. income in non-U.S. Source,

    2. payment is effectively connected with a U.S. trade or business and individual has filed Form 4224, or

    3. income is partially or totally exempt or subject to a reduced withholding rate due to a tax treaty and individual has filed Form 8233 to claim the exemption or reduced rate.

    4. Income is subject to a reduced withholding rate (14%) by IRS Code (scholarships and participant support for F-1 and J-1 visa holders.)

  2. U.S. Residents

    Withholding is required at the rate of 28% on payments for services if SSN is not provided.

  3. Non-Wisconsin Resident Entertainers

    Institutions must withhold 6% of payments to nonresident entertainers if accumulated payments for entertainment services exceed $3,200 (including travel reimbursements) in a calendar year and the entertainer has not filed WT-11 with a surety bond or cash deposit, or provided a waiver from the Department of Revenue. Each institution must institute a procedure for accumulating payments to nonresident entertainers to determine if the $3,200 limit has been reached.