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Why does it take longer for international participants to receive honorarium payments?

Answer: 

There are other considerations to keep in mind when it comes to honorarium payments to international participants, including but not limited to:

 

Foreign Individuals/CA Nonresidents (activity in U.S. and California):

 

  • Need to confirm the individual is eligible for payment under current U.S. immigration status prior to activity.
  • Need to enter into GLACIER.
  • Tax determination by Tax Services is needed for correct tax withholding from the gross payment amount.
  • Need to confirm the individual is eligible for payment by UC Merced Export Controls (U.S. Treasury, Office of Foreign Asset Control)
  • The amount is Form 1042-S reportable income to the individual. Federal tax withholding of 30% applies unless tax treaty exempt.
  • California Nonresident withholding 7% deducted from the gross honorarium payment if payments made to an individual exceed $1,500 in a calendar year. The amount is reportable on annual CA FTB Form 592-B.

 

Foreign Individuals/CA Nonresidents (activity in the U.S. but outside California):

  • Need to confirm the individual is eligible for payment under current U.S. immigration status prior to activity.
  • Need to enter into GLACIER.
  • Need to confirm individual is eligible for payment by UC Merced Export Controls (U.S. Treasury, Office of Foreign Asset Control)
  • Tax determination by Tax Services is needed for correct tax withholding from the gross payment amount.
  • The amount is Form 1042-S reportable income to the individual. Federal tax withholding of 30% applies unless tax treaty exempt.

 

Non-US Citizens (Foreign)/CA Nonresidents (activity outside U.S.):

  • No tax reporting or withholding; taxable income in a foreign country to the individual.
  • Need to confirm the individual is eligible for payment under UC Merced Export Controls (U.S. Treasury, Office of Foreign Asset Control)
  • One-time payment does not create a nexus for UC Merced to register in the country.
  • Tax determination by Tax Services needs to be done to ensure payment is made outside of the United States (additional foreign source income statement form may be necessary).