RESEARCH ASSOCIATE TAX WITHHOLDING Revised 6/12/07 Your Research Associate salary is considered wages (compensation for services performed). U.S. Citizens: If you are a United States citizen, the University must withhold federal and Wisconsin income taxes according to the information you placed on your W-4 form. You are also subject to social security and medicare tax. If you are not a U.S. Citizen: You must complete the Alien Tax Information Request Form (UW1123) within the International Tax Packet (UW1469), which is available at http://www.bussvc.wisc.edu/ecbs/itx-international-tax-packet-uw1469.pdf and return it to the University of Wisconsin-Madison, Office of Human Resources, Payroll and Financial Services at 21 North Park Street, Suite 5101, Madison, WI 53715-1218. Your completed Alien Tax Information Request Form (UW1123) will help you determine if you are a resident alien or nonresident alien for U.S. income tax purposes. The International Tax Packet (UW1469) also includes a Tax Treaty Table. Refer to this table to determine if your country of permanent residence has a provision that excludes all of your “research” (*students on practical training, see below) wages from U.S. and Wisconsin income tax. If you are eligible for a treaty, you will need to complete an additional tax form (as noted below) to claim the benefit. For more detailed information refer to the Internal Revenue Service (IRS) Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, which is available at http://www.irs.gov/pub/irspdf/p515.pdf. Resident Aliens: If you are a resident alien and eligible for a tax treaty you must complete an IRS Form W-9, Request for Taxpayer Identification Number and Certification, which is available in the International Tax Packet (UW1469). If you are not eligible for a tax treaty, the University must withhold federal (IRS) and Wisconsin (DOR) income taxes according to the information you placed on your W-4 form. All resident aliens are subject to the social security and medicare taxes, regardless if you are eligible for a tax treaty or not. Nonresident Aliens: If you are eligible for a tax treaty you must complete an IRS Form 8233, Exemption From Withholding on Compensation For Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual and a Revenue Procedure Statement 87-9 (UW1463) form (*students on practical training, see below). Both of these forms are available in the International Tax Packet (UW1469).
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If you are not eligible for a tax treaty, the University will be required to withhold federal (IRS) and Wisconsin (DOR) income tax from your salary on the basis of Single with 1 allowance. This translates to approximately 15% of your gross pay for federal tax and 6.5% of your gross pay for Wisconsin tax. All nonresident aliens not on an F-1 or J-1 visa will be subject to social security and medicare tax. If you are on an F-1 or J-1 student visa, you will be exempt from the social security and medicare tax for the first five years in the U.S. If you are on a J-1 non-student visa, then you will be exempt from the social security and medicare tax for the first two years you are in the U.S. *Students on Practical Training: If your primary purpose in the United States is as a student and you are currently on practical training, then you need to claim your Research Associate wages as “studying and training” for treaty benefits purposes. If you are a resident alien, you will still need to complete the IRS Form W-9 Request for Taxpayer Identification Number and Certification, which is available in the International Tax Packet (UW1469). If you are a nonresident alien, then you will need to complete the IRS Form 8233 Exemption From Withholding on Compensation For Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual and Revenue Procedure Statement 87-8 (UW1462). Both of these forms are available in the International Tax Packet (UW1469). For additional information or questions: Please contact the Office of Human Resources, Payroll and Financial Services at the University of Wisconsin-Madison at 608-262-9933 or by email payroll@ohr.wisc.edu or visit their website at http://www.bussvc.wisc.edu/ecbs/ecbs.html. You can also call IRS from within the U.S. for general assistance at 1-800-829-1040, toll free. For tax treaty questions call 215-516-2000. To order IRS forms and publications within the U.S., call 1-800-829-3676, toll free or visit their website at http://www.irs.gov/. To contact DOR for assistance you can call 608-266-2486. For DOR forms and publications, call 608-266-1961 or visit their website at http://www.dor.state.wi.us/.