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Procedures: Payments to Foreign Businesses or Persons

Please note that expense reimbursements or honoraria cannot be made to foreign individuals until they arrive in the United States and their visa immigration status is determined.  

The first step is to determine if an individual can legally be paid an honorarium and/or travel reimbursement--the visa classification must be that of a "B" visitor, and the individual must be engaged in academic activities at an academic institution or nonprofit research institution. The academic activity can last no longer than nine days. Visitors are limited to five (5) such reimbursements or honoraria payments in a six-month period (the 9/5/6 rule).  The foreign person should complete and sign the Payment of International Visitors form to document this determination.  Please provide a copy of the offer letter sent to the individual, as well as, a copy of the identity page and expiration date of his/her passport and Form I-94 received at arrival.

"B" visitor covers all of the following classifications. Any one of these classifications or a combination, as indicated, can qualify for honorarium payments and reimbursements.

•    B-1 visitor for business
•    B-2 visitor for pleasure
•    B-1/B-2 visitor for a combined purpose
•    WB visitor visa waiver for business
•    WT visitor visa waiver for tourism
•    WB/WT visitor visa waiver for a combined purpose

Canadian citizens may cross the border by land and their visa type is presumed to be "B" status.

If an honorarium or payment for other services provided in the U.S. is to be paid, Form W-8BEN is required and 30% federal tax withholding is applied unless there is a treaty available for the country of origin. A U.S. social security number or individual taxpayer identification number (ITIN) is NOT required, unless claiming an exemption from the 30% federal tax withholding.  In order to claim a treaty exemption, the foreign individual will need to complete IRS Form 8233.  If the foreign individual does not already have a SSN or ITIN, the Business Office can assist with filing IRS Form W-7 to apply for an ITIN.  If applying for a treaty exemption and SSN or ITIN, if applicable, the Business Office will need to provide the IRS with original copies with original signatures and in some cases, notarized copies of supporting documentation. Consequently, the visitor must be present in the Business Office to complete these exemption documents.  The Business Office does not need to wait to receive the taxpayer identification number before paying the person and filing Form 8233.  

For payments for services provided outside the U.S., Form W-8BEN is required, but no SSN or ITIN is required and no withholding is applied.

Foreign Businesses
Foreign businesses should submit either Form W-8BEN-E or Form W-8ECI.  The mandatory 30% federal tax withholding is applied unless an applicable treaty exemption is properly claimed or services are provided outside the U.S. (see above).

The rules for payments of honoraria and other services vary by country and visa type.  It is recommended that staff that intend to contract with foreign individuals or businesses contact the Business Office at least a month in advance to discuss their particular arrangements to help ensure that there is adequate time to research and prepare the appropriate documentation.   

Not Reviewed