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.
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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
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.
You can read more about form W-8BEN here.
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 Calculus.
They will need an ITIN if they are not eligible to receive a Social Security Number, but 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 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?
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