If the recipient of a University salary, scholarship, or other type of payment is a nonresident alien, special withholding and reporting rules apply. These rules
generally provide for reporting on Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding (which is a form that is comparable to Form W-2 and Form 1099). With the exception of certain wage payments, which will be reported on Form W-2, ALL payments made to nonresident aliens must appear on Form 1042-S.
The United States has over 40 tax treaties with foreign nations which serve, in some instances, to reduce the withholding requirements, or exempt the tax completely, on payments made to citizens of that particular country. Employee wages that are exempt from federal and state income taxes due to a tax treaty will be reported on Form 1042-S.
Forms 1042-S should be received by recipients by March 15 for prior year payments.
More information may be found in University of Maine System's Administrative Practice Letter #43 Payments to Nonresident Aliens.
If you have a question about Form 1042-S, contact your local university's human resources /payroll office. Be prepared to give your Employee ID number.
Last Updated: August 7, 2007