Frequently Asked Questions

1.  Our department would like to pay an individual who will provide consulting services as an independent contractor. What can our department do to ensure that payments to this individual can be made as a contractor versus an employee?

A. The IRS has very strict guidelines as to who qualifies for independent contractor status. The main reason being that the University would not have to withhold and remit taxes with each payment as is required for employees paid out of payroll. It is the policy of the University that all individuals are treated as employees and must be paid out of payroll unless the individual meets the 20 factors test. The department can submit the completed 20 factors form (PDF) and a copy of the proposed contract to the Tax Department for review prior to making a commitment to the individual to ensure the payment is set up appropriately.

2.  Our department would like to invite an individual from a foreign country to give a lecture. We'd like to pay the professor an honorarium. Will the payment be taxed? What type of visas may receive honorarium?

A. The general rule is that any payments to a foreign individual are taxed at 30% unless exempt by tax treaty.

The following information will be needed to properly address the tax withholding on a foreign individual and if any tax treaty is available.

1. Completed Alien Information Request Form
2. Valid SSN or ITIN
3. Location of activity
4. Source of the payment
5. Type of activity
6. Length of time of the activity
7. Type of visa the individual holds
8. Residence of the foreign visitor

Generally foreign individuals who receive honoraria are on a B1/B2 Visa.

3.  Our foreign visitor speaker doesn't have a SSN or ITIN? What should we do?

A.The University must withhold income tax of 30% on payment to a foreign visitor who does not have an SSN or ITIN.  The individual may attach  a Form W-7, Application for IRS Individual Taxpayer Identification Number (PDF) to their annual personal tax return Form 1040NR or Form 1040-EZ to apply for a ITIN.  The IRS will process their return and also issue them an ITIN card.

4.  Our department doesn't have all the information for a foreign visiting professor. May we still pay the professor?

A. The foreign professor may still be paid with 30% withholding on the payment. Additionally if there is no SSN or ITIN the IRS will penalize the University $50. That cost will be charged to your department's budget.

5.  A vendor is requesting a Form W-9 from the University. How do I obtain a completed Form W-9?

A. A completed W-9 (PDF) is included in the attached link.

6.  Is the University exempt from sales tax on ?X? type of purchases?

A. The University has been granted exemption from sales tax on qualifying purchases for our educational operations in three states: District of Columbia, Maryland, and Virginia. Each state determines which goods and/or services are eligible for exemption.

Sales tax exemption certificates must be presented to vendors at the time of purchase. Contact the Tax Department for guidance as to whether a particular good or service is eligible for exemption.

Download forms here.

7.  Where can I get a copy of our federal tax exemption letter? Who prepares exemption certifications or registrations?

A. Download copies of federal and state exemption letters and certifications here.

Any new exemption certifications or registrations should be processed by the Tax Department