Understanding Federal Withholding for International Research Scholars and Student EmployeesFor tax purposes in the United States, individuals can be classified in one of four groups: U.S. citizen, permanent resident, resident alien for tax purposes or nonresident alien for tax purposes.
Nonresident Alien Taxes
To determine tax residency, non-U.S. citizen employees, students or independent contractors, excluding permanent residents, are required to use GLACIER, a nonresident tax compliance system that collects information about an individual's immigration status, visa, country of residency and history of presence in the United States. To properly pay and tax employees, the following determinations must be made:
- Residency tax status (nonresident or resident for tax purposes)
- Eligibility to claim a tax treaty exemption (based on country of residence)
- Nonresident Social Security and Medicare tax exemption
Upon completion of the required data within GLACIER, all system-generated forms and copies of immigration documents must be submitted to Payroll Management Services to withhold the appropriate taxes from an employee’s payroll payments.
Who Receives a 1042-S Form?
A nonresident employee who earned wages that were exempt from federal withholding taxes due to a tax treaty will receive a Form 1042-S from Payroll Management Services. Nonresidents will receive a 1042-S and W-2 form if wages earned are above the tax treaty limit.
Students and Independent Contracts
Payroll Management Services provides 1042-S forms for the reporting of scholarships, fellowships, honorarium, royalties, and cash prizes or awards paid to nonresident students, research scholars, consultants or guest speakers, honoraria recipients, and artist/performers during the tax year.
1042-S forms are also provided for independent contractors who are international visitors. International visitors must have a mandatory 30 percent U.S. federal income tax deducted from any non-payroll payment for independent personal services performed inside the United States. In limited cases, this tax may be avoided with a treaty benefit application. Disbursements and Travel Services send information to Payroll Management Services to see if payment to independent contractors is taxable.
Some countries allow treaty benefits for business or personal services. Independent contractors with valid immigration status who are residents of these countries may wish to apply for the treaty benefits to reduce the required 30 percent U.S. federal income tax that must be withheld from service payments. A listing of treaty benefits is available in IRS Publication 901.
The Internal Revenue Service (IRS) requires employers to send 1042-S forms to eligible individuals no later than March 15 each year. The university typically mails them mid-February to the individual’s campus or home mailing address.
What Is GLACIER?
GLACIER Is the Nonresident Tax Compliance System
UTSA implemented GLACIER to assist with federal nonresident tax compliance.
GLACIER is designed to collect information about an individual's immigration status, citizenship, residency and history of presence in the United States to determine an individual's residency tax status (nonresident or resident alien for tax purposes) and eligibility to claim a tax treaty exemption and/or the nonresident social security tax exemption. The system is designed to allow the individual to input all information online; however, Payroll Management Services does the initial setup for accountability purposes.
Ensure You Renew Your Tax Treaty Status and Update Your Information
All non-U.S. citizen employees (excluding permanent residents) are required to use GLACIER. Payroll Management Services runs the Tax Treaty renewal process and sends out an email to all who require the renewal. This is sent out usually by November each year.
Throughout the year, all individuals who have established records in GLACIER will be periodically reminded to log back in to GLACIER to update their records and resubmit paperwork if there are changes to the following:
- Immigration status
- Expected departure date
- Email or home address
- Social Security number
Doing so will prompt Payroll Management Services to make any changes required in a timely manner to ensure compliance with all federal nonresident tax laws.
Use GLACIER Tax Prep (GTP)
Use GLACIER Tax Prep for Guidance in Filing Your Taxes
To assist international students and scholars with tax concerns, UTSA is sponsoring free access to GLACIER Tax Prep (GTP). GTP assists students and scholars in preparing nonresident U.S. tax returns. It is a web-based U.S. federal income tax filing system specifically formulated for international students and scholars. GTP is available free of charge every year to UTSA international students and scholars. It provides step-by-step instructions and assistance with the preparation of the appropriate tax forms. GTP is always available late February or early March every year.
DISCLAIMER: Access to Glacier Tax Prep is being made available by Payroll Management Services. It is intended only for UTSA international students and scholars. To request access, email Payroll Management Services or call 210-458-4280.
Documents You Need to Use Glacier Tax Prep
You need the following documents and information available before you start using GTP:
- Form I-20 (F visa) or DS2019 (J visa)
- U.S. entry and exit Dates for current and past visits to the United States
- Forms W-2, 1042-S and/or 1099 (Any of these forms if received. You must not have all three forms. You can either have one or two of the forms, or all three.)
Before you start preparing your tax returns, be sure you have received your year-end tax statements, including your W-2 and/or 1042-S (for those who had Tax treaty or were taxed on their scholarship/fellowship), if you were employed. UTSA sends Form 1042-S around late February or early March. If you file your tax return without the appropriate tax statements, you will need to file a corrected form, and could be liable for penalties.
After you completed all information in GTP, it generates the correct U.S. federal income tax forms — either Form 1040NR or 1040NR-EZ, Form 8843 and other forms as applicable. If you did not earn any income in the United States in a given year, GTP will generate only Form 8843 for you.
The DEADLINE to file taxes in every given year is April 15, unless the IRS makes a changes.
Glacier Tax Prep is a product of Arctic International LLC, and was neither created nor developed by UTSA. UTSA does not warrant its accuracy or otherwise warrant its performance. UTSA assumes no legal liability or responsibility for the completeness, accuracy or usefulness of Glacier Tax Prep, or your use or misuse of this product. Glacier Tax Prep is provided strictly "as is." UTSA disclaims all liability or responsibility of any kind arising out of the use of this product and makes no representation or warranty, express or implied, with respect to Glacier Tax Prep, including without limitation, as to (a) the merchantability or fitness for a particular purpose or use; or (b) the results to be obtained from using Glacier Tax Prep. Glacier Tax Prep is not a substitute for obtaining advice from a qualified tax professional and UTSA recommends that you obtain advice from a qualified tax professional. Please bear in mind that this software is intended only for international students and scholars at UTSA with income sources and levels typical of students and scholars at the University. By using Glacier Tax Prep, you are agreeing to be bound by the terms and conditions set out herein and all applicable laws and regulations. If you do not agree with any of these terms, do not use Glacier Tax Prep. Because UTSA is not the creator of Glacier Tax Prep, no UTSA office will be able to provide any technical assistance.
**If your Glacier Tax Prep tax return is rejected or if you receive a letter from the IRS asking for clarification or a request for more information, you should contact the Glacier Tax Prep Support Center via the help link at their site. You will need to provide a copy of the IRS letter and the tax return as submitted.