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Nonresident Taxes

For tax purposes in the United States, individuals can be classified in one of four groups: U. S. Citizen, Permanent Resident, Resident for tax purposes, or Nonresident for tax purposes.

To determine tax residency, non-U.S. citizen employees, students or independent contractors, excluding permanent residents, are required to use GLACIER, a nonresident tax compliance system, which collects information about an individual's immigration status, visa, country of residency, and history of presence in the United States. In order to properly pay and tax employees, the following determinations must be made:

1. residency tax status (nonresident or resident for tax purposes),
2. eligibility to claim a tax treaty exemption (based on country of residence) and/or
3. Nonresident Social Security and Medicare tax exemption.

Upon completion of the required data within GLACIER, all system generated forms as well as copies of immigration documents must be submitted to Payroll Services in order to withhold the appropriate taxes from an employee’s payroll payments.

1042-S Forms

Employee

A nonresident employee who earned wages that were exempt from federal withholding taxes due to a tax treaty will receive a Form 1042-S from Payroll Services. Nonresidents will receive both a 1042-S and W-2 form if wages earned are above the tax treaty limit.

Students & Independent Contracts

The Payroll Services department provides 1042-S forms for the reporting of scholarships, fellowships, royalties and cash prizes paid to nonresidents during the tax year.

1042-S forms are also provided for independent contractors who are international visitors. All international visitors must have a mandatory 30 percent U.S. federal income tax deducted from any non-payroll payment for independent personal services performed inside the U.S. In limited cases, this tax may be avoided with a treaty benefit application.

1. Some countries allow treaty benefits for business or personal services. Independent contractors in valid immigration status who are residents of these countries may wish to apply for the treaty benefits to reduce the required 30 percent U.S. federal income tax that must be withheld from service payments. A listing of treaty benefits is available in .

The Internal Revenue Service (IRS) requires employers to send 1042-S forms to eligible individuals no later than March 15 of each year, and the university typically mails them mid-February to the individual’s campus or home mailing address.

GLACIER—Nonresident Tax Compliance System

What is GLACIER?

The University of Texas at El Paso has implemented use of a Web application called GLACIER to assist with federal nonresident tax compliance.

GLACIER is designed to collect information about an individual's immigration status, citizenship, residency and history of presence in the United States (U.S.) to determine an individual's residency tax status (nonresident or resident alien for tax purposes) and eligibility to claim a tax treaty exemption and/or the nonresident social security tax exemption. The system is designed to allow the individual to input all information online.

GLACIER presents easy-to-understand question and answer screens that allow employees to quickly and easily enter their information, calculate their substantial presence, and print their tax forms (provided as PDF documents on the final screen). Users will be required to print and sign their forms and submit them to Human Resources along with copies of their visa, passport and immigration documents.

GLACIER Record Creation and Updates

All non-U.S. citizen employees (excluding permanent residents) are required to use GLACIER. Individuals who need to create a GLACIER record will be programmatically identified based on their I-9 citizenship code.

Users must remember these because they will need them to return to GLACIER in the future to renew a tax treaty or make a change to the information entered in GLACIER.

Throughout the year, all individuals who have established records in GLACIER will be periodically reminded to log back in to GLACIER to update their records and resubmit paperwork if there are changes to the following:

• immigration status
• expected departure date
• email or home address
• social security number

Doing so will prompt Payroll Services to make any changes required in a timely manner to ensure compliance with all federal nonresident tax laws. Additionally, individuals claiming a tax treaty exemption will be required to log in to GLACIER to create a new Form 8233 each tax year, as required by the IRS.