CAMP IPPS August 21, 2018

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June Avis Woods
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1 CAMP IPPS 2018 August 21, 2018

2 WELCOME CAMPERS A few things to remember West Ballroom Stop by the ballroom to ask us questions after the class! Meet Connexxus travel vendors in honor of the Connexxus 10 th anniversary Raffle prize options are located throughout the ballroom. Place your raffle ticket in the box next to the prize that catches your eye!

3 Glacier and Non-California Resident Withholding Heather Rutkowski Room number and time slot [Leave blank] When and why Glacier is needed? What information does the payee see? What does IPPS do with the information? What are the different payment types and withholding rates? How Long does the process take? What is Non-California Resident Withholding and when does it apply?

4 WHAT IS GLACIER AND WHY IS NEEDED Glacier is a secure web-based nonresident alien tax compliance system that the University of California uses to collect tax-related information from foreign visitors. Glacier helps determine tax residency, tax withholding rates, and income tax treaty eligibility, and it is also used to send out yearly tax form 1042-S. It s used by all UC campuses and addresses all federal tax obligations.

5 WHAT IS GLACIER AND WHY IS NEEDED cont Completing a Glacier record is mandatory for all foreign visitors receiving payment from UC San Diego except: U.S. Citizens Permanent residents with permanent resident cards Those with Employment Authorization Card showing category 33. This indicates DACA (Deferred Action Childhood Arrival) status. Refugees Asylums

6 PPS VS. NON PPS PPS = Payroll Personnel system handled by Payroll University employee Non PPS = Non Payroll Personnel system handled by IPPS A Person or Company doing business with UCSD and is not an employee. Non PPS Payment types (Income type) Guest Speaker/Honoraria Consultant Performer/Artist/Athlete Industrial Royalty - right to use, patents, trademarks, secret processes and formulas Copyright Royalty (software) - payment is made to the legal owner of the property, patent, copyrighted work, or franchise by licensees Prize or Award Fellowship or benefits (health insurance, etc.)

7 WITHHOLDING RATES The withholding rate could vary depending on the payment type, tax treaty, and visa type. Guest Speaker/Honoraria, Consultant, Performer/Artist/Athlete = 0% - 30% Industrial Royalty, Copyright Royalty 0%, 5%, 10%, 15%, or 30% Prize or Award = 0% or 30% Fellowship = 0% or 14%

In order to claim a tax treaty with the U.S.

8 TAX TREATY Some countries have treaties with the U.S. that allow their citizens to be exempt from some or all federal tax. Treaties vary according to country, immigration status (visa type), and type of income. In order to claim a tax treaty with the U.S., the payee must have either a SSN, an ITIN or a Foreign Tax ID A Foreign Tax ID is a Tax ID the payee uses in their home country to file their taxes

HOW DOES THE GLACIER PROCESS START? Department completes the Glacier Record Request Form https://blink.ucsd.edu/buypay/payments/tax/glacier.

9 HOW DOES THE GLACIER PROCESS START? Department completes the Glacier Record Request Form An ASK case will be generated to notify us a glacier record is needed. We will then send out Glacier access information to the payee. Department will receive an notifying them that the access information has been sent to the payee.

10 HOW DOES THE GLACIER PROCESS START? Cont. Payee completes online Glacier questionnaire and submits forms with all required documents listed on the Tax Summary report. Forms can be mailed in or ed as PDF IPPS will add the Payee to IFIS and MyPayments. Department will receive an notifying them that the payee has been added to our system and that they can continue with the payment process.

11 HOW DOES THE GLACIER PROCESS START? Cont. For Marketplace Suppliers when indicating they are doing business in the U.S. or selling software on the Payment Compass supplier form: Foreign Individual: A new ASK case will be generated once the payee has been setup in IFIS and Marketplace Tax team will send out Glacier access information to the payee. Please note that payment cannot be made for work performed in the U.S. or software until the completed Glacier paperwork is received Foreign Entity: Required to attach tax form W-8BEN-E to supplier form. With this form the Tax team will enter information into Glacier.

12 HOW LONG DOES THE GLACIER PROCESS TAKE Payee cannot complete the Glacier form if their arrival to the U.S. is more than 30 days out Guest Speaker/Honoraria Consultant Performer/Artist/Athlete Fellowship or benefits (health insurance, etc.) After access information has been sent, timing of the process depends on how fast the payee completes the form and we receive the completed paperwork. Once the completed Glacier paper is received in IPPS, setup process can take 2-4 business days.

13 NON-CALIFORNIA RESIDENT WITHHOLDING: Non-wage payments to nonresidents of California are subject to state income tax withholding if the total payments during a calendar year exceeds $1,500 for services performed in California. California nonresidents include: All Individuals who are not residents of California. Business entities such as corporations, partnerships or LLCs that are not registered with the California Secretary of State to do business in California or have no permanent place of business in California. Withholding Rates: U.S. Individual or U.S. entity = 7% Non U.S. Individual = 12.3% Non U.S. Entity = 8.84%

14 EXAMPLE OF WITHHOLDING Federal Withholding: Payee is from Russia, sells computer software to UCSD, bills $2, for the software. UCSD will withhold $ ($2, x 30%) and payee will receive payment for $1, The amount withheld is remitted to the IRS on a weekly basis Payee will receive tax form 1042-S at the end of the year to file with their taxes If payee qualifies for the tax treaty and withholding is 0% then payee will receive full amount of payment and still receive 1042-S at the end of the year because this is reportable income to the IRS

15 EXAMPLE OF WITHHOLDING Non-California Resident Withholding: Payee is from Washington, comes to California to provide consulting services, bills UCSD $2, for labor. UCSD will withhold $ ($2, x 7%) and payee will receive payment for $1, The amount withheld is remitted to the State on a quarterly basis. Payee will receive tax form 592-B at the end of the year to file with their taxes. If the payee is foreign and comes to California to perform a service then federal and state withholding may apply. Payee will receive tax forms 1042-S and 592-B

16 For Questions please Submit a case through ASK. Go to Blink/Business Tools/ASK (BFSupport). For Glacier: Primary category = Invoices, Bills, and Payments Subcategory = Foreign Payees (Glacier Process) For Tax: Primary category = Invoices, Bills, and Payments Subcategory = Tax on Goods and Services

17 Don t forget to stop by and visit us in the Price Center West Ballroom

CAMP PAYING: INNOVATIVE SOLUTIONS

CAMP IPPS 2016 CAMP PAYING: INNOVATIVE SOLUTIONS Spelunking in the Cave of Tax Topics Presented by Heather Vinograd PC West: Eleanor Roosevelt College Room 2:30 3:15 TAX TOPICS Non-payroll Payments SALES