All posts tagged Payroll

  • How to determine FICA tax exemption for your nonresident employees

    Withholding Fica tax on nonresident employees

    The tax withholding of nonresident employees has become a big issue for payroll offices in organizations across the US.

    One issue that has become particularly tricky for payroll staff is the proper determination of FICA tax exemption.

    Where an organization employs multiple nonresidents – each with differing personal circumstances and visa requirements – it can be challenging to properly separate the nonresidents that should be paying FICA from those that should not.

    In this guide, we are going to take a closer look at the circumstances in which a nonresident is exempt from FICA deductions and share some tips for effective management of nonresident payroll. Continue reading “How to determine FICA tax exemption for your nonresident employees” »

  • Do you use Workday to manage employee payroll? Sprintax Calculus can help with your nonresident tax withholding

    Workday employee payroll

    There is no doubt about it. Workday has been a game-changer in simplifying work processes for payroll office staff.

    Where once payroll/tax compliance staff relied on a plethora of different resources to manage their payroll requirements, Workday has worked wonders in centralizing the process into one tool.

    After all, no wonder so many employers around the US use the software!

    But while Workday has made the task of withholding tax from US citizens straightforward, managing the tax requirements of nonresident employees can still be a real headache.

    The good news is that Sprintax Calculus (formerly Sprintax TDS) has been designed to tackle this specific problem.

    In this guide we are going to take a look at how Calculus can work hand-in-hand with Workday and simplify your nonresident payroll requirements.
    Continue reading “Do you use Workday to manage employee payroll? Sprintax Calculus can help with your nonresident tax withholding” »

  • Introducing your one stop shop for determining tax treaty entitlements!

    Sprintax Calculus (TDS) new tax treaty engine

    Sprintax Calculus (formerly Sprintax TDS) launch new Tax Treaty Engine

    Every year, the proper documentation and withholding of tax from nonresidents becomes a bigger issue for organizations around in the US.

    Exactly how a nonresident should be taxed depends on a number of unique circumstances including where they’re from, the type of income they are earning and the amount of time they have spent in the US.

    Staying on top of these requirements has become a significant challenge for payroll office staff in a plethora of different industries.

    The correct determination and application of tax treaty benefits to employee paychecks is particularly challenging.

    After all, the US has signed tax treaty agreements with 66 different countries. Continue reading “Introducing your one stop shop for determining tax treaty entitlements!” »

  • Hiring a J1 worker? Here’s everything you need to know about tax!

    Hiring a J1 visa employee

    The J1 visa program was stopped in its tracks in March 2020, following the outbreak of COVID-19.

    Thankfully, in large part due to vaccination rollout, demand for J1 visas is starting to climb again in 2021.

    If you intend to hire J1 employees at your organization, it is important to ensure that their tax compliance is managed correctly from the start.

    With that in mind, this article will cover everything you need to know to ensure J1 workers are taxed correctly, as soon as they start work.

    Continue reading “Hiring a J1 worker? Here’s everything you need to know about tax!” »

  • Which tax forms does Sprintax Calculus support?

    Tax forms supported by Sprintax Calculus

    Sprintax Calculus is a secure hassle-free online software, which will help your institution to manage tax compliance for each of your nonresidents.

    In this guide, we are going to take a closer look at the many tax forms which can be prepared for your nonresidents using Sprintax Calculus.

    Form W-4

    Every nonresident working in the US must complete a W-4 when starting a new job.

    This form is used to determine exactly how much tax should be withheld from the nonresident’s paycheck.

    Sprintax Calculus (formerly Sprintax TDS) enables nonresidents to complete their W-4 correctly and factors in all relevant tax credits and deductions.

    Form W-4

    1042-S

    If a nonresident receives any of the below forms of income, their tax withholder must provide them with a 1042-S before 15 March.

    • Scholarship
    • Fellowship
    • Grant
    • Teaching or research income (where exempt under a tax treaty)
    • Compensation during study and training (exempt by a tax treaty)
    • Investment income
    • Deposit interest on a US bank account

    Form W-8BEN

    Form W-8BEN

    Income earned by nonresidents in the US is typically taxed at a rate of 30%. However, the nonresident may be entitled to a reduction in tax by availing of tax treaty benefits.

    In order to claim tax treaty benefits, nonresidents must complete the form W-8BEN.

    Sprintax will outline any tax treaties that are available to your nonresidents.

    Form W-8BEN-E

    Money generated by foreign businesses is also typically subject to a 30% tax rate. By completing a Form W-8BEN-E (also known as Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting), foreign vendors can avail of tax treaty benefits and a reduction in tax.

    Sprintax Calculus automatically generates Form W-8BEN-E for foreign vendors.

    Form 8233

    Form 8233 must be filed by all nonresidents who earn a certain type of scholarship, personal services or fellowship income including compensatory scholarship or fellowship income from the same withholding agent.

    With this form, the nonresident aliens claim exemption from withholding for certain personal services, because of an income tax treaty.

    Sprintax Calculus will enable nonresident users to complete their Form 8233 easily online.

    Form W-7

    Nonresidents can also apply for an Individual Taxpayer Identification Number (ITIN) with Sprintax TDS.

    Nonresidents will need an ITIN if they are not eligible to receive a Social Security Number, but they are eligible to receive scholarship payments.

    They also need to file a federal tax return with the IRS for income from US sources or if they are entitled to a refund of withheld taxes under a tax treaty. Form W-7 can be used to apply for a new ITIN if the existing one is expiring.

    Form W-9

    Form W-9 is used to provide and certify a Taxpayer Identification Number (TIN) and to verify that the nonresident is not subject to backup withholding.

    Typically this form is used when a person is required to report certain types of payments. It is also used by a third-party who should file an information return with the IRS. Form W-9 requests information from the taxpayer such as name and address.

    Form W-9

    Form SS-5

    Form SS-5 is a social security administration’s application document for requesting a social security card, whether it be a new card or a replacement one.

    The nonresident must provide certain documents that prove their identity, age, citizenship status and they must be the originals not photocopies (or certified by the agency that issued them).

    Want to learn more about how Sprintax Calculus can help your payroll department?

    To find out more about Sprintax Calculus, why not register for a free demo here.

     

  • 5 Painful payroll problems Sprintax Calculus instantly solves for educational institutions

    Sprintax Calculus solves payroll problems

    Properly documenting and withholding the right amount of tax from nonresidents has become an increasingly important issue for educational institutions.

    International students come from a variety of different countries and spend different amounts of time in the US. So how can you manage all of your international students from a tax perspective when no ‘one-size-fits-all’ rule applies?

    Sprintax Calculus (formerly Sprintax TDS) is a tool that ensures nonresidents are taxed correctly from their first day working in the US – guaranteeing that the right amount of tax is withheld from their earnings and reported to the IRS.

    A cloud-based payroll software, Sprintax Calculus is already working with more than hundreds of educational institutions all over the US.

    How does Sprintax Calculus work?

    The first point to note is that Sprintax Calculus is completely cloud-based. No software installs are required. As soon as foreign nationals come into the campus, they are assigned an account on Sprintax Calculus.

    They answer a simple online questionnaire and, based on their answers, our payroll tool determines their residency status for tax purposes, as well as identifying what treaty benefits they are entitled to and whether they can avail of any deductions.

    Sprintax Calculus also enables you to withhold the correct amount of tax from payments made to them.

    Finally, our software generates the relevant tax forms for the nonresident – including forms 1042-S, W-4, W-8BEN, 8233. It can also generate the W-8BEN E series if you are engaging with foreign vendors.

    When filling out our questionnaire, students can rely on an experienced Live Chat support team 24/7 who can answer their questions.

    When tax filing season comes around, students can transfer their data to the Sprintax tax preparation software. This will enable them to prepare their Federal and State tax return (and form 8843) easily online.

    How Sprintax Calculus helps you solve payroll problems

    1. It saves time!

    It can be complex and time-consuming to determine how to individually tax each one of your international students and scholars.

    Sprintax Calculus is a tool specifically designed to help schools withhold and report the correct amount of tax from US payments to nonresident students, scholars and professionals who are being paid scholarships, wages and stipends.

    2. It cuts out paperwork

    Our software Sprintax Calculus is an innovative, paper-free way to manage all tax-related forms.

    Instead of dealing with endless paperwork, Sprintax Calculus allows you to store information securely in the cloud.

    The document exchange function allows your nonresidents to store and upload tax-related documents in a secure place that you can access as needed.

    3. Tax treaty research is a thing of the past!

    Forget spending hours leafing through the IRS website researching tax treaty agreements.

    You can easily determine whether your nonresidents are eligible for any tax treaties and deductions with Sprintax Calculus. Our software also confirms whether or not the employee is a resident or nonresident for tax purposes.

    4. Forget archaic solutions! Sprintax Calculus is a user-friendly, one-stop shop!

    The software highlights the tax status of your international scholars and students on a convenient admin dashboard and defines how they should be taxed on income from your institution.

    You can upload multiple users to the system or manually upload students by entering their name and email on the upload wizard. The users will receive a welcome email with a link to their Calculus portal.

    You can see in real-time how many students have completed their accounts and view all the activity that is taking place in the system.

    Admins will also have reports and access to important payroll information such as tax residency status, country of residence, applicable tax treaties and their status on TDS.

    You can also generate your own individual report with the information you prefer. You will be able to choose the columns you wish to see and export the report into a CSV file.

    The administrator is able to access the student’s portal and edit the information on their profile, to make sure the information is correct. The system documents who was the last user to make any changes. The admin will also be able to generate a 1042-S form for each selected user.

    Admins can access a report of all payments per user, income code, dates, tax rates, tax calculated and all other information that the institution may need to review for each student. To make it even easier, all the information can be exported into Excel.

    The dashboard will also give you information about the students who have missing information and you will be able to send them reminders.

    Sprintax TDS resolves payroll problems

    5. We remove tax season stress!

    Each nonresident’s details can be transferred from Sprintax Calculus into our tax preparation solution. This will enable each user to easily file their tax documents (Federal and State tax returns and form 8843) before the deadline.

    Want to learn more about Sprintax Calculus?

    To find out more about how Sprintax Calculus can help your payroll office, why not register for a FREE Sprintax TDS demo here.