Payments to Independent Contractors
Prior to engaging an individual to perform services for the University as an independent contractor, the Syracuse University Department Worksheet to Determine if an Individual should be Paid as a Non-Employee must be completed. This worksheet provides guidelines and directions for proper classification and payment of individuals.
If the University has control only of the result of the services, and not over how, when, where, or under what conditions the work is performed, the individual is an independent contractor. Fees and honoraria are lump sum payments for professional services rendered by non-employees of the University for a short-term period, as well as payments to bonafide consulting firms for services rendered fall into the category of payments to independent contractors. Payments to independent contractors are made through Disbursements Processing.
U.S. Citizens and Permanent Residents
U.S. Citizens and Permanent Residents must submit a W-9 form which provides their SSN and a permanent home address in order to receive a payment from Syracuse University as an Independent Contractor.
Payments to U.S. Citizens and Permanent Residents for services as an Independent Contractor are taxable income, but there is no tax withholding required. The University is, however, required to report payments of $600.00 or more made to non-employees for services on form 1099MISC to the recipient and to the IRS. Payments totaling less than $600.00, although taxable income to the recipient, are not required to be reported.
To be paid as an Independent Contractor, a Non-Resident Alien must be present in the United States on a Visa that permits the individual to receive such payments. The Slutzker Center for International Services should be consulted to verify visa type and eligibility prior to arranging for services/payments of this nature. In addition, it is preferred that the individual have a SSN or an Individual Taxpayer Identification Number for tax reporting purposes.
Non-Resident Aliens must submit a W-8BEN form in order to receive a payment from Syracuse University as an Independent Contractor.
If the payee is a Non-Resident Alien individual who is a U.S. person for tax purposes (e.g. passes the substantial presence test), or a business incorportated in the U.S., a W-9 form is required. Only the individual or business entity can make this determination.
Generally, payments to a Non-Resident Alien for services as an Independent Contractor are taxable income, subject to withholding at 30%, and reportable to the recipient and to the IRS on form 1042-S. Payments for services performed outside the United States are not taxable or reportable.
The existence of a Tax treaty between the individual’s country of residence and the U.S. with a provision for payments for independent personal services may result in an exception to the withholding requirement, if the individual meets the terms of the treaty. These terms may pertain to length of stay in the U.S. and/or the amount of the payment.
Prior to paying a Non-Resident Alien as an Independent Contractor, departments should see the Payments to Nonresident Aliens as Independent Contractors/Consultants-Checklist to determine the individual’s tax status as well as to learn about requirements or obtain forms that are necessary to initiate payment. .
Payments to individuals for services as an Independent Contractor are made on a Request for Payment of Professional Services Rendered by Non-Employees form with a completed Syracuse University Department Worksheet to Determine if an Individual should be Paid as a Non-Employee attached.
Bonafide consulting firms should be paid against an invoice issued by the consulting firm.
Questions regarding an individual’s status as an independent contractor should be directed to the Office of Human Resources at 443-4042 or firstname.lastname@example.org.
Questions regarding payments to independent contractors should be directed to Disbursements Processing at 443-2484 or email@example.com.
Questions regarding payments to Non-Resident Aliens should be directed to Payroll at 443-4042, option 2 or firstname.lastname@example.org.