The University of Chicago Payroll User's Guide

SECTION II. TAX INFORMATION

1. FLOWCHART OF REQUIRED TAX AND U.S. IMMIGRATION DOCUMENTS

The chart above indicates the various taxes and U.S. immigration documents required to set up an employee on the Payroll/Personnel system. The forms will be required of each employee, whether they have students or regular staff positions. All tax forms should be submitted directly to the Payroll Department, unless directed otherwise by your division. These forms and the instructions for filling them out are available from the Payroll Department and the AdmiNET forms page.

2. FORMS REQUIRED FROM ALL EMPLOYEES

1. INS Form I-9 — Employment Eligibility Verification Form Each employee hired by the University is required to fill out an INS (Immigration and Naturalization Service) I-9 Form and furnish the required supporting documents. Each employee must be certified for employment (have I-9 and supporting documentation reviewed by a University representative) and the employee must complete Section 1 of this form at the time of hire, which is the actual beginning of employment. The University must complete Section 2 by examining evidence of identity and employment eligibility within three (3) business days of the date employment begins. Responsibility for certification of employment and record retention of required documentation is delegated as follows:
   

Academic employees
The department hiring the academic employee is responsible for certifying the employee and maintaining a permanent record of the employee's I-9 document and supporting documentation in their department files.

Staff employees (Regular and Temporary employment)
It is University Human Resources Management's responsibility to certify the employee and maintain a permanent record of the employee's I-9 and supporting documentation.

Staff employees (Staff One Time employment)
It is the hiring department's responsibility to certify the employee and forward the I-9 with supporting documentation to the Payroll Department. It is the Payroll Department's responsibility to maintain a permanent record of "Staff One Time' employee's I-9 and supporting documentation.

Student Casual employees (Student Casual employment)
It is the hiring department's responsibility to certify the employee and forward the I-9 with supporting documentation to the Payroll Department. It is the Payroll Department's responsibility to maintain a permanent record of "Student Casual" employee's I-9 and supporting documentation.

NOTE: All required fields on the I-9 form must be completely and accurately filled out as specified on the back of the I-9 document. A University employee cannot be paid unless the I-9 Form is certified by the responsible department and the Employee Data Base is updated with the information.

2. Federal W-4 Form — Employee Withholding Allowance Certificates

All NEW employees must submit both a Federal and State W-4 Form upon employment. All W-4 Forms should be submitted directly to the Payroll Department. If the appropriate W-4 forms are not received by the scheduled payroll closing date, taxes will be withheld from the employee's check at the highest rate (single marital status, with zero withholding allowances). If an employee wishes to change his or her federal or state withholding information or desires additional withholding, they must fill out a new W-4 Form with the correct information and send it to the Payroll Department.

Exemption from Withholding Taxes
IMPORTANT, if an employee writes the word "EXEMPT" in box number 7 on the Federal W-4 Form, this means that the University will NOT DEDUCT any federal withholding taxes from the employee's paychecks. According to the IRS, employees should only claim exemption from withholding for the reasons stated in point 7 on the federal W-4 Form.

Employees claiming exemption from federal and state withholding taxes must file new W-4 Forms by January 31 of each new calendar year, otherwise the University will withhold tax at the highest rate until a new W-4 form has been received and processed. Employees NOT claiming exempt status need not file new W-4 Forms unless they wish to change the current withholding information.

Information for Non-Resident Aliens
Generally, nonresident aliens may claim only one allowance, single martial status and an additional amount of $15.29 (Biweekly employees), or $33.13 (Monthly employees), regardless whether or not they have a spouse and children on IRS W-4 Form. Residents of Canada and Mexico can, if married, claim their spouse and children, no matter whether or not the spouse and children are living with them in the United States. Residents of Japan and Korea can claim the spouse and children ONLY if they are living with the nonresident alien in the United States.

3. State W-4 Forms — Employee Withholding Allowance Certificates

Illinois Residents and Indiana Residents who work in the State of Illinois
Employees who are tax residents of the State of Illinois or tax residents of the State of Indiana who work in the State of Illinois are required to fill out a State of Illinois IL-W-4 Form.

Iowa and Kentucky Residents
Employees who are tax residents of Iowa and Kentucky, and who work in the State of Illinois may claim exemption from Illinois State income tax under reciprocity agreements between those states. To claim this exemption, employees should fill out an Employee's Statement of Non-residence in Illinois Form, IL-W-5NR, and forward this form to the Payroll Department. State income taxes will not be deducted when reciprocity is claimed.

Indiana Residents who work in the state of Indiana
Employees who are tax residents of the State of Indiana and who WORK IN THE STATE OF INDIANA must fill out a State of Indiana W-4 Form.

Michigan and Wisconsin Residents
Employees who are tax residents of Michigan and Wisconsin, and who work in the State of Illinois, may, in addition to claiming exemptions from Illinois State income tax under reciprocity agreements, request to have their Michigan or Wisconsin State Income Tax withheld. To apply for Michigan or Wisconsin tax withholding, employees should fill out both the Employee's Statement of Non-residence in Illinois Form, IL-W-5NR, and Employee's Michigan withholding Exemption Certificate, MI-W4, or Employee's Wisconsin Withholding Exemption Certificate (WT-4). Forward these forms to the Payroll Department.

Other States
The University of Chicago is registered to withhold and pay employment taxes to the following states: California, Missouri, New Mexico and New York. Employee's who are tax residents and work for the University in these states should complete the following Employee's Withholding Allowance Certificates and forward the forms to the Payroll Department. The payroll Department must also receive written confirmation from the Departmental Administrator that the employee is providing services for the University of Chicago in those states.

State of California, EDD Form DE 4 Employee's Withhold Allowance Certificate

State of Missouri, Missouri Dept. of Revenue, Form MO W-4 Employee's Withholding Allowance Certificate

State of New Mexico, New Mexico, Employee's Withholding Allowance Certificate

New York State, Form IT 2104, Employee's Withholding Allowance Certificate

3. ADDITIONAL FORMS REQUIRED FROM NON-U.S. CITIZENS BASED ON THEIR VISA CLASSIFICATION AND WHETHER THEY ARE ENTITLED TO CLAIM A TAX TREATY EXEMPTION.
   
   
   1. University Form UPP192 — Alien Tax Information Request Form
      This form must be submitted for any new employee who is not a United States Citizen. This form provides the Payroll Department with information concerning the employee's visa status and related tax treaty information. NOTE: It is the employee's responsibility to notify the Payroll Department whenever his/her visa status changes, since any alteration in visa status may change the employment/tax status of the individual. All changes should be reported using the Alien Tax Information Request Form.
      
      
      

      COPIES OF DOCUMENTS TO BE ATTACHED TO UPP192 FORM
      Permanent Residents	Green Card
      Permanent Resident Applicants	A valid (unexpired) Employment Authorization Card and Letter from INS stating that Permanent Residency application has been processed or Stamped Passport indicating "Processed for I-551"
      F-1 Students	I-94 Departure Record card and I-20 Form, Certificate of Eligibility (F-1 status) and Copy of US Visa from your passport (If student is on "Optional" Practical Training, also attach a valid Employment Authorization Card indicating "Practical Training"
      F-1 Practical Trainees	see F-1 Students requirements above
      J-1 Students	I-94 Departure Record card and DS-2019 Form, Certificate of Eligibility (J-1 status) and Letter from J-1 Responsible Officer authorizing employment. Copy of US Visa from your passport
      J-1 Practical Trainees	I-94 Card and DS-2019 Form (see J-1 Student requirements above) and Letter from sponsoring institution-authorizing employment
      J-1 Visitors	I-94 Arrival/Departure Card (both sides) and DS-2019 Form, Certificate of Eligibility...(J-1) Status
      H-1B Distinguished Workers	I-94 Departure Record card (both sides) and I-797 and INS Notice of Action and UC Office of International Affairs LCA Notice and copy of US Visa from your passport
      F-2, J-2 or H-4 Spouses	I-94 Arrival/Departure Card (both sides) and a valid, unexpired Employment Authorization Card
      TC Canadian Professionals	I-94 Arrival/Departure Card (both sides) and Picture Page of Canadian passport

      
      
      
   2. IRS Form W-9 — Request for Taxpayer Identification Number and Certification

      This form is required for any new employee who is considered to be a Resident Alien for tax purposes, and for employees whose status changes from nonresident to resident alien under the substantial presence test.

   3. Form W-9A — Attachment to IRS Form

      This form is required for any new employee who is considered a Resident Alien for tax purpose and is claiming exemption from withholding on wages due to an existing tax treaty between the United States and employee's county of permanent residence.

   4. IRS Form W-8BEN-I or W-8BEN-S — Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding

      This form is required for any new employee who is a Nonresident Alien.

   5. IRS Form 8233 — Exemption From Withholding on compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual

      This form is required for any new employee who is a Nonresident Alien and is claiming exemption from withholding on wages due to an existing tax treaty between the United States and employee's county of permanent residence.

   Currently, the University grants tax exemptions for wages, based on IRS Form 8233, to the following categories of employees:

   1. Students from countries with tax treaties with the United States, up to the limit specified in the individual treaty.
   2. Teachers and researches from countries with tax treaties with the United States, up to the limit specified in the individual treaty.
      
      

   Federal regulations require the University to immediately forward a copy of the employee's Form 8233 to the IRS. The exemption from withholding becomes effective for payments made at least 10 days after the form was sent to the IRS 3/4 that is, no tax-exempt payments can be made to an employee for a period of 10 days after the form was sent by the University to the IRS. If the University is notified by the IRS that the individual's compensation is not eligible for the exemption, the University will be required to deduct taxes at the appropriate tax table rate based on the employee's gross earnings.

   NOTE: To maintain exempt status for the duration of the tax treaty period, nonresident alien employees claiming tax treaty exemptions must file a new IRS Form 8233 with the Payroll Department by January 5th of each new calendar year.

   Aliens may determine whether or not they are eligible for treaty exemption by consulting IRS Publication 519, U.S. Tax Guide for Aliens and Publication 901, U.S. Tax treaties. Current copies of these publications are available from the IRS Web site.

   6. Certificate of Compliance (Sailing Permit) Year to Date Earnings Statement

      At least 2 weeks prior to leaving the United States, Aliens who hold certain INS Classifications must obtain a Certificate of Compliance, Sailing or Departure Permit, from Internal Revenue Service. To obtain a Sailing or Departure Permit, the alien must first request a Statement of Year to Date Earnings from his/her employer. The Comptroller's Office Payroll Department will normally be able to complete the necessary paperwork for University employees in two working days.

   Aliens may determine whether or not they must obtain a Certificate of Compliance, Sailing or Departure Permit by consulting IRS Publications 513, Tax Information for Visitors to the United States. Current copy of this publication is available from the IRS web site.

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