Policy and Procedure: 601-Tax Compliance, Reporting, and Withholding on Non-Salary Payments

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

Central Withholding Agreement (CWA)

Employee Payments

    • All employee service and award 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 employees for participating in Research Subject studies which can be paid either through (1) the Human Resources System (HRS), or (2) a Payment to Individual Report (PIR).
    • Employee Payment Flowchart


Federal and State Tax Reporting

Federal Tax Withholding


Individual Taxpayer Identification Number (ITIN) Questionnaire

Internships and Internship Support

Legal Settlements

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

Payments to Foreign Vendors

Resolving Tax Issues Prior to Payment

Royalties (Definition, Payment Processing, and Tax Reporting)

Sales and Use Tax

Sponsorship Payments

Student Payments (Services, Scholarships, Awards)

Student Organizations

Substantial Presence Test Form

Support Payments


Tuition Reporting (1098-T and 1098-E)

Unrelated Business Income (UBI) Unrelated Business Income Tax (UBIT)

Value Added Tax (VAT)

W-9 for UW (IRS Approved Substitute W-9 for UW)

W-9 Compliance

Wisconsin Entertainer Tax

Year End Tax Reporting/Responsibilities

Appendix 1 -UW-Madison Interpretation/Definition of Entertainer

Appendix 2 -Important Tax Information


Jose A. Carus Jr.