Policy and Procedure: 601-Tax Compliance, Reporting, and Withholding on Non-Salary Payments
Date: 04/26/2012
Statement of Policy and Procedure:
The University of Wisconsin System will report taxable payments to the IRS, Wisconsin Department of Revenue, and the individual receiving the payment and withhold federal or state income taxes from payments as required by Federal and State laws. Also, the University of Wisconsin will require social security numbers or Individual Taxpayer Identification Numbers (ITINs) for non-resident aliens as required by Federal law.
In general, payments to an individual may be considered taxable income, subject to federal and/or state tax. The purpose of this policy is to discuss which types of non-salary income are taxable and which tax forms are used to report that income to the federal and state government and the individual.
Tax Compliance and Financial Reporting Mission, Goals, and Objectives:
Table of Contents:
- Employee Payments
- All employee service payments must be processed through the Human Resources System (HRS). Employee business expenses must be processed through the E-Reimbursement system. The only exception is for payments to employee for participating in Research Subject studies which can be paied either through (1) HRS or (2) a Payment to Individual Report (PIR).
- Federal and State Tax Reporting
- Federal Tax Withholding
- U.S. Residents
- Nonresident Aliens (NRA)
- Refund
-
Forms
- Internal Revenue Service (IRS)
- University of Wisconsin (UW)
- Wisconsin Department of Revenue
- Wisconsin Department of Revenue (DOR) Nonresident Entertainer Form WT-11[Note: applies to all Entertainers who are Nonresidents of Wisconsin whether U.S. Persons or Nonresident Aliens (NRA)]
- Nonresident Alien (NRA)
- Non-U.S. Source Income (Payments to Non-Resident Aliens for work performed Outside the U.S.)
- Payment Methods (Allowable for Tax Reportable Payments)
- Payment Recipient Types
- Resolving Tax Issues Prior to Payment
- Sales and Use Tax
- UW Policy
- Wisconsin Department of Revenue (DOR)
- WI Tax Requirements Relating to Nonresident Entertainers (Publication 508)
- Sales and Use Tax Information (Publication 201)
- Sales and Use Tax Information for Colleges, Universities, and Technical Colleges (Publication 204)
- Sales Tax Exemptions for Nonprofit Organizations (Publication 206)
- Sales Tax Rate Chart (includes County Tax Rates)
- Where is the UW Exempt?
- States
- Countries: UW is not exempt outside the U.S.
- Note: UW is not exempt from Excise tax or other non-Sales and Use Tax
- Training
- Tuition Reporting (1098-T and 1098-E)
- W-9 for UW (IRS Approved Substitute W-9 for UW)
- W-9 Compliance
- Wisconsin Entertainer Tax
- Definition of Nonresident Entertainer
- Examples of Nonresident Entertainer
- Reciprocity Agreements
- Contract Price
- Procedures for Filing Surety Bond or Cash Deposit
- Entertainment Contract Process
- Tax Withholding and Reporting
- Third Party Payment Policy
- WI Tax Requirements Relating to Nonresident Entertainers (Publication 508)
- Year End Tax Reporting/Responsibilities
- Appendix 1 -UW-Madison Interpretation/Definition of Entertainer
- Appendix 2 -Important Tax Information
Who should know this procedure?
All UW Dean's Offices, Directors, Departments, and Staff who (1) prepare non-salary payments via any payment mechanism, and (2) work with Nonresident Aliens (NRA).
Contacts:
For topics that the Tax Compliance and Financial Reporting Area can assist with please refer to Tax Compliance and Financial Reporting Office Mission and Goals.
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