Alien - Accounts Payable Payments to Nonresidents - Overview

Independent Personal Service Payments   

The IRS considers all service payments to be employment, unless the withholding agent can properly document that there is truly and independent personal service relationship.

UC Policy on independent personal service payments is provided by Business and Finance Bulletin: BUS 77. A resource guide to the application of these policies can be found in the related article, How to Hire an Independent Contractor, Consultant.    

At UCLA, payments for Independent Personal Services are processed through Accounts Payable’s BruinBuy system. Payments typically made under this category are one time payment lecture fees & honorarium.

Payments for independent personal services processed through BruinBuy, include the following:

  • Honorarium — an award granted in recognition of a special service or distinguished achievement. It is a monetary gift which requires no services rendered to the University.
  • Lecture fee —  a payment for a one time lecture or a series of lectures that occur in a span of two weeks or less.
  • Performance fee — made to an individual or group for professional services not directly related to an academic function.
  • Consultant Fee — payments made for consulting services.  Consulting service payments must be approved through Purchasing.
  • Professional Services — payments made for professional services performed by an independent contractor, per UC policy.

Individuals being compensated for Independent Personal Services, who are not U.S. Citizens or Permanent Residents, are required to have entered the United States on a visa/status that is eligible to receive compensation for the services that they are providing. Refer to Visa Status Eligibility for Independent Personal Service Payments for more detail.

Independent Personal Service payments to nonresidents which are processed through BruinBuy, are reviewed and tax coded by Payroll Services. Taxes are withheld from the payment when processed through BruinBuy.

Payroll Services is responsible for tax coding and withholding from the payment and reporting nonresident tax information. For more detail on this process, refer to How to Process an Independent Personal Services Payment to a Foreign National.

Non-Service Payments

Non-Service payments are payments which do not require a service to be performed, and are not intended to support educational expenses or individual research.

Non-Service payments to nonresidents which are processed through BruinBuy, are reviewed and tax coded by Payroll Services. Taxes are withheld from the payment when processed through BruinBuy.

Payroll Services is responsible for tax coding and withholding from the payment and reporting nonresident tax information. For more detail on this process, refer to How to Process a Non-Service Payment to a Foreign National in Related Information.

Non-Service payments to nonresidents which are processed through BruinBuy include the following:

  • Royalties — payment for the right to use a copyright on a book, periodical, articles, etc or use of patents, trademarks, formulas, and goodwill.
  • Non-Employee based Prize/Awards — payment based upon a specific past achievement, unrelated to achievements which occur as a UC Employee.
  • Death Payments — Payment to the beneficiary (or beneficiaries) of a deceased UCLA employee.
  • Human Subject Payments — payment for participating as a Human Subject in a research study.

Payments not Processed through Accounts Payable

Payments/reimbursements that should not be processed through Accounts Payable are listed below.

Type of Payment/
Reimbursement
Comments
ParkingEmployees must pay for their own parking. Processed via payroll deduction according to the individual’s pay schedule, unless the parking expense is part of UC business related travel.

Non-employee — if the parking is an ongoing expense, parking may be reimbursed if the person is on UC business.

Student — payments for parking fees on behalf of a nonresident student is tax reportable income. Contact Payroll Services prior to processing.
Medical Insurance PremiumsEmployees — only eligible employees are allowed a contribution of medical insurance through the Payroll System. Eligibility is dependent upon the appointment of the employee. No reimbursements of insurance premiums paid by an employee will be allowed through Accounts Payable.

Non-employee — payments for medical insurance premiums for non-employees  would be considered a gift of University funds which is not allowed.

Student — all student medical health insurance is payable through undergraduate or Grad Division (i.e., BAR).
AwardsEmployees — all employee incentive awards, prizes, or awards based upon an achievement accomplished as an employee, must be paid through payroll. 

Fellowship/Scholarship Student Awards — all students, whether graduate, post doc, undergraduate, receiving an award to provide financial support for future academic activity or research. This is paid though the through the BAR system.
ServicesNo employee may be paid for services rendered through Accounts Payable.
TravelTravel reimbursements are processed by Travel Services.
Education Expenses that are deemed to be taxable need to be paid through the Payroll System.

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