Budget and Finance Policy and Procedure Office
A Division of The Office of Budget and Finance
A Division of The Office of Budget and Finance
To make payments to Non-U.S. Citizens who are not University employees easier to understand, the University has created the following guidelines. Each situation may be different. Questions should be directed to the Central Procurement Accounts Payable Team via Procurement Assistance Request .
When a Non-U.S. Citizen who is not a University employee is invited to Penn State to interview, conduct research, or give a lecture—or when the University pays for that individual’s travel—specific steps must be followed. These guidelines explain how to make payments and what forms are required.
The Non-Employee Information (NEI) Form should be sent to the individual before travel. The form must be completed and returned before any payment is made. This form identifies the individual’s residency status and determines what documents are required.
All non-employees receiving payments from the University must include a completed NEI Form with their payment documentation, unless they select “I AM A UNITED STATES CITIZEN” in Section II. U.S. Citizens do not need additional documentation.
Department should refer to the Non-U.S. Citizen Documentation Chart (VISA Chart) to determine which documents are required. Each admission classification requires specific documents before payment can be approved.
The NEI Form does not need to be an original and may be faxed, scanned, or emailed.
The "Country of Residence" on the NEI Form refers to where the individual lives and pays taxes. It may be different from the person’s country of citizenship or passport. This information is used to determine tax treaty eligibility and documentation requirements.
For most air and sea arrivals, U.S. Customs and Border Protection no longer issues a paper admission stamp in the passport. Instead, the individual’s admission information is recorded electronically on the I-94 record.
The electronic I-94 record shows the individual’s admission classification, date of entry, and authorized length of stay. This information must be reviewed to confirm eligibility for payment.
Some admission classifications allow a stay of up to 90 days, while others list “D/S,” which means the individual may remain in the United States for the Duration of Status. Duration of Status is common for F-1 and J-1 students. If the I-94 record shows a specific end date, the University may not make payments for expenses incurred after that date.
The I-94 record must be clear and readable. The admission classification, entry date, and authorized length of stay are required to approve payment. Since this document is uploaded into SAP Concur, it must remain legible for review and approval.
The U.S. Customs and Border Protection Agency uses the ESTA program for visitors from Visa Waiver countries (WB and WT classifications). These individuals must apply for travel authorization before entering the United States.
Visitors entering under ESTA will still receive an Admission Classification stamp in their passport showing the entry date and authorized stay.
Departments should provide an official letter of invitation to the Non-U.S. Citizen. This letter may be required for entry into the United States with the correct admission status. Individuals entering under business classifications (B-1 or WB) must have a letter confirming the business purpose of the visit.
The J-1 visa is sponsor-specific and may restrict certain payments. If a J-1 Scholar or Researcher sponsored by another institution will receive an honorarium or payment for services, additional approval is required.
The department must provide:
The Responsible Officer must issue an Authorization Letter approving the visit and payment. This letter must be included with payment documentation. A sample Authorization Letter is available on this website for convenience.
Authorization letters are required only for 1099-reportable payments such as honorarium or professional services.
All J-1 Visitors must provide a copy of their Certificate of Eligibility for Exchange Visitor (J-1) Status (called the DS2019 form), along with the NEI form and Admission Classification Stamp.
The W-9 form is required when you are paying income such as honorarium or professional service fees to Permanent Residents or individual considered Residents for Tax Purposes. A W-9 is not required for expense reimbursements.
When required, the W-9 must be uploaded into PaymentWorks during registration. Additional details are available on the Office of Central Procurement website.
A copy of a VISA is never required for payment documentation. Visas are not trip-specific and are not used to support travel reimbursement or 1099 payments. Many countries participate in the Visa Waiver Program and do not require a VISA to enter the United States.
If a Non-U.S. Citizen changes their status or extends their authorized stay while in the U.S., they will receive Form I-797A (Notice of Action) from the Department of Homeland Security.
This form is a full-page document that is often folded into the passport. A complete copy of the form is required for payment approval.
If the University pays travel costs on behalf of a Non-U.S. Citizen using a P-Card (such as airfare or lodging), the same documentation requirements apply as if the individual were being reimbursed directly. All documentation must be included in SAP Concur.
Payments for honorarium or professional services, require additional documentation beyond travel reimbursement requirements.
Individuals holding an H-1B visa may not receive 1099 payments unless they have an Employment Authorization Document (EAD card).
The Treaty List for Individual Personal Services should be used to determine tax treaty exemptions for 1099 payments. This list does not apply to international student employees, which are handled by Payroll.
To qualify for a tax treaty exemption, the individual must:
Individuals entering under B-1/WB or B-2/WT status cannot apply for a Social Security Number but may apply for an ITIN.
If the individual qualifies for a tax treaty exemption, the Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, known as the Form 8233, must be completed and submitted with the payment documentation.
Form 8233 must include an original signature and cannot be faxed, or copied once it is signed. The Central Procurement Accounts Payable Shared-Services team submits the form to the IRS.
All fields must to be completed, except Item 10 and Items 13-18. The payee must sign on the "SIGN HERE" line above section IV.
If the Non-U.S. Citizen does not qualify for a tax treaty exemption, the University must withhold federal income tax at the rate of 30% from the 1099 payment. This withholding must be approved when the Non-PO Invoice is processed.
If the Non-U.S. Citizen does not have a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN), the SSN field is completed using 111-11-1111. The 30% tax amount must be entered on the Withholding tax tab of the Non-PO Invoice and will be posted to General Ledger account 21500800.
The cost object will be charged the full payment amount before taxes are applied (Screenshot #1). The vendor will receive the net amount after the tax withholding is deducted (Screenshot #2).
If funds are available, the department may choose to “gross up” the payment so the cost object covers the tax amount. This allows the Non-U.S. Citizen to receive the full intended payment. To calculate the grossed-up amount, divide the desired payment amount by 70%. This calculation includes the 30% tax.
Example: for a $1,000 honorarium payment, divide $1,000 by 70% ($1,000 ÷ .70) and the amount is $1,428.58. This is the gross amount of the vendor amount and taxes due. To check the amount, multiply $1,428.58 by 30% and that should be the tax amount. The $1,428.58 will post to your budget line and will be recorded on the Withholding Tax Base (W/Tax Base FC). The $428.58 will be recorded on the Withholding tax tab as the Withholding Tax Amount (W/Tax Amt in FC) and the net amount of $1,000 will be what the vendor is paid.
$1,000.00 ÷ 70% = $1,428.58
$1,428.58 x 30% = $ 428.58
Two screen shot examples with tax withholding:
Screenshot #1
Screenshot #2
Penn State follows all Department of Homeland Security and Internal Revenue Service laws and regulations related to payments made to Non-U.S. Citizens. Failure to provide proper documentation may result in significant penalties during an audit. While some visitors may question the documentation requirements, the University must follow federal law.
The Department of Homeland Security and the Internal Revenue Service may change laws and regulations from time to time. This website will be updated as changes are identified. Departments are encouraged to review the site regularly and ensure they are using the most current versions of the Non-Employee Information Form, Treaty Chart, and all related documents.
| Central Procurement - Accounts Payable Team
300 Science Park Road Suite 213 State College, PA 16803 |
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| Voice | (814) 865-4421 |
| Fax | (814) 865-3028 |
| nns1@psu.edu |