Posted date 1/27/2006 source GW-mail

This email is intended for all individuals in F-1 and J-1 immigration status who are employees of UNT and have entered the United States in the year 2002 or later as an F-1 or J-1 student. Please distribute to those individuals in your department in F-1 and J-1 status who do not have access to Groupwise.

On October 31, 2005, the IRS issued new rules for 2006 for withholding on wages of nonresident employees. Whether you are a nonresident employee depends upon the results of the 183 day "substantial presence test" as described in IRS Publication 519. Generally, if you entered the United States in 2002 or later, you are a non-resident for the calendar year 2006 if you are currently in F-1 or J-1 status.

The goal of the new rules is to provide withholding on wages that more closely approximates your income tax liability. The new rules accomplish this with new form W-4 rules and special payroll computations for withholding on wages. The new rules will be in effect for any payment after February 1, 2006.

New Form W-4 Rules

1. Do not claim exemption from withholding in box 7.
2. Use single status even if married (check "married but withhold at higher single status" if married) in box 3.
3. Claim only one exemption (there are some exceptions to this rule) in box 5.
4. Write "NRA" on the dotted line on Line 6.

Students from India

Generally, students from India DO NOT need to complete a new W-4. They are generally already following the new rules as a result of the treaty between the U.S. and India.

Students who entered the U.S. in 2001 and earlier.

If you entered the U.S. as an F1 or J1 individual in 2001 or earlier and remained in the U.S., this new procedure does not apply to you.

Students electing to be treated as U.S. residents under Internal Revenue Code Section 6013 or by treaty

Students electing to be treated as a resident due to marriage to a U.S resident or citizen or individuals electing U.S. resident treatment under a tax treaty will not need to file a new W-4.

Students who do not yet have a U.S. Social Security Number

Students who do not yet have a U.S. Social Security Number will have to wait until they receive one before completing a new W-4.

Students affected by the new rules

Most other international students will need to complete a new W-4 for withholding under the new rules to be correct. You may continue to have your taxes withheld based on the current W-4 on file. However, withholding will be higher under the new rules than it was under the old rules for the same W-4. An IRS Form W-4 has been attached to this email for your convenience.

Questions:

Will my withholding be lower based on the new W-4 rules?

Generally, yes.

What if I do not submit a new Form W-4?

Your previous W-4 will remain in effect. However, in most cases your withholding will increase by between $22.00 and $33.00 per month based on someone receiving the same income under the new rules compared to the old rules.

Where do I turn in the new W-4?

You may turn in your revised W-4 to the Payroll Office in Marquis Hall 127.

If you have questions, please contact Jim Webb in Payroll at 940-369-7014 or via email at jwebb@unt.edu.

Thank you,
Jim

*********************************************
Jim Webb
Tax Accountant/Assistant Director Payroll
University of North Texas
Payroll Office
PO Box 310949
Denton, TX 76203-0949
Phone: 940-369-7014
Fax: 940-369-7770
jwebb@unt.edu
GO MEAN GREEN!