State Funded Independent Contractors (Honoraria) Business Day 2011

Agenda 3 Most Common Errors Determination of Worker’s Status Employee vs. Independent Contractor International Issues/Processing Regulations New Statewide Financial System

3 Most Common Errors Missing Authorized Signature Missing information about the payer Missing the Determination of Worker’s Status

Authorized Signature Authorized person in the department must sign on part VII

Information about the payer

Determination of Worker Status Required when submitting honoraria Determine Employee vs. Independent Contractor Honoraria will no longer be accepted without determination Can not pay as honoraria to avoid taxes, fringe etc.

Determination of Worker Status

Determination of Worker Status

International Issues/Process International visitors can be paid without an SSN or ITIN-result is 30% tax All paperwork must be submitted (Form A, Form B, copy of passport and I-94) If tax treaty eligible, 8233 paperwork will be sent and honoraria held until 8233 is returned. Canadians are an exception and can be paid honoraria without a visa or I-94. Visitors should obtain a B1/B2 visa for honoraria, there are few exceptions

International Issues/Process Visitors in the following categories are not eligible for honoraria H-1B, O-1, TN (can only receive wages from sponsoring employer) F-1 students who do not have an employment authorization document There are always going to be unique situations that do not follow the norm, please call us before promising payment

Rules and Regulations Must be the appropriate form of payment not the easiest US Citizens will received a 1099 if they earn more than $600 in a calendar year International visitors will receive a 1042-S Payments made to individuals outside the US are foreign sourced and require no tax withholding or reporting If payment for services will exceed $20000 within a fiscal year, a contract should be entered into

Rules and Regulations If the payee has been paid by the State of New York as an employee in the same calendar year, they must be paid as extra service through the State payroll system. State employment includes any other State college or university as well as the Department of Corrections, Department of Transportation etc.

New Statewide Financial System (SFS) Go Live Date 1-1-2012 Every person receiving honoraria will have to be added to the new system prior to being paid Required information: W9 for US Citizen, W8 for Foreign citizen. This will not change anything for foreign visitors coming to the US and receiving honoraria, they will continue to be paid through State Payroll and not the SFS system. NYS Foreign Vendor registration request form must be included for foreign visitors being paid through Accounts Payable. (never entered US or travel reimbursements)

Per NYS payment guidelines What is a foreign vendor: A foreign vendor can include a corporation that was created or organized outside the United States and has a legal address outside the United States, or an individual whose permanent residence is outside the United States. When registering a foreign vendor, NYS Vendor Management Unit uses the Foreign Vendor Registration Request Form, in conjunction with the appropriate Internal Revenue Service (IRS) Form W-8 Once an individual is paid from NYS funds a vendor ID is obtained. Procurement services will provide that number to the department for use in future payments.

CONTACTS University Human Resources-Forms, International issues, and Verification of State employment Michael Lukasik Carlos Gallardo lukasik2@buffalo.edu cg36@buffalo.edu 645-4423 645-4430 Amanda Brown amandab@buffalo.edu 645-4429

CONTACTS Accounts Payable/Travel- Payments, Statewide Financial System, and Regulations Heidi Retzer hretzer@buffalo.edu 645-4532

State Funded Independent Contractors (Honoraria) Questions