Fiscal Services

Payments to Foreign Nationals/Vendors

Foreign Nationals are strictly limited in what sources of income they are authorized to accept and all payments are taxable unless an exception under a treaty or IRS code applies.

  • B-1, B-2, VWB and VWT are prohibited from being employed but may be paid under the Honorarium rule conditions. See for details: Certification of Eligibility
  • F-1 and J-1 students may be employed on and off-campus under certain circumstances. See OIPS website for details: https://oips.gmu.edu/
  • H-1B, O and E-3 visas are restricted to temporary workers in specialty occupations.
  • TN visas are restricted to Mexicans and Canadians workers in specialty occupations.
The list of payment types below  provides reference information, links to required documents and/or instructions to complete documentation.

Award, Prize, or Research Subjects

Payment as a reward or recognition for a special achievement, such as winning a judged competition or payment for participation as a research subject. Standard taxation rate: 30% 

Employment Income

Please watch, review and fill out the appropriate forms for “Payments for Dependent Services” that an individual performs or carries out for the University as an employee. Graduated income tax rates apply.  

Honorariums, Independent Contractors and Performer Services

Payment to an individual for a presentation-oriented, guest lecture or invitational event, or payments for services performed by individuals who are not employees and who meet the criteria of Independent Contractor evaluation. Standard taxation rate: 30%

This section explains the rules for withholding tax from pay for personal services. Independent personal services are personal services performed by an independent nonresident alien contractor as contrasted with those performed by an employee.

This Category of Pay Includes
  • Payments for professional services
  • Honoraria paid by colleges and universities to visiting teachers, lecturers, and researchers

An honorarium may include consideration for travel expenses that are not reimbursed with a Travel Reimbursement voucher. Please see Honorarium Procedures for details on paying an Honorarium to an Foreign national.

  • Please include a “Invitation to Visit” Letter a sample letter can be found here: Letter A (UPDATE template to Mason University)

Royalty

Payments made for the use of intangible (royalty) property, including software royalty. Various tax rates apply up to 30% withholding – see IRS Publication 515 for specific details.

Scholarship and Fellowship Awards

A one-time payment to assist a student in pursuing a course of study or research.  Generally not considered taxable income if the recipient is a candidate for a degree and the award is used to pay for tuition and fees required for all students in the course of study.  

General Rules for Scholarship Payments to Non-immigrants

It is the responsibility of George Mason University to report and withhold tax on non-qualified scholarships and fellowships for non-immigrants whose tax status is nonresident alien (NRA).

The scholarship or fellowship grant is subject to tax based on the Nature of the Payment and the Tax Status of the Recipient. Please see Scholarship Procedures for Foreign Nationals for details.

Qualified Scholarship or Fellowship (Nontaxable)

  • An amount paid and used for tuition and fees required for enrollment or fees required to attend an accredited educational institution and required course-related fees such as books and supplies.

Non-Qualified Scholarships or Fellowships (Taxable)

  • An amount paid and used for anything such as travel, room and board, equipment and supplies that is not required for courses.
    Payments of taxable scholarships or fellowships to nonresident aliens are reportable to the IRS.

Prize/ Award

  • An amount given to, or for the benefit of an individual based on a past accomplishment or activity. Generally, it is subject to a 30% withholding rate.

Exceptions:

  • The scholarship is neither reportable nor subject to the U.S. tax withholding if the scholarship is from sources outside the United States.
  • The scholarship paid by a resident of the United States to a nonresident alien who conducts their study, training, or research outside of the United States is considered to be a foreign source grant and is not reportable to the IRS and is not subject to withholding of Federal income tax.

Tax Status of the Recipient

Payment Type and Recipient Withholding and Reporting Withholding and Reporting, if Tax Treaty Benefits Available
Qualified Grant –Any Recipient None None
Nonqualified Grant – Nonresident
Alien in F-1, J-1, M-1, or Q-1 status		 14% Tax withholding
Reporting on 1042-S IRS form		 Tax Treaty withholding rate
Reporting on 1042-S IRS form
Nonqualified Grant – Nonresident
Alien in any other status		 30% Tax withholding
Reporting on 1042-S IRS form		 Tax Treaty withholding rate
Reporting on 1042-S IRS form
Nonqualified Grant – Resident Alien None, but may be reportable on the student’s side Reporting on 1042-S IRS form
Nonqualified Grant – Recipient’s tax
status unknown		 30% Tax withholding
Reporting on 1042-S IRS form		 N/A

The Department requests scholarship payment following standard university procedures.

Documents Required:

Service Payments to a Foreign Entity

Payments made to foreign companies or entities. Standard taxation rate: 30% 

Travel Reimbursements

The Mason Finance Gateway, powered by Chrome River, is our travel and expense management system and used to process all reimbursements. Click here for additional information on using the Mason Finance Gateway.

For details about processing a travel reimbursement please refer to the Travel Reimbursements to Foreign Nationals Guide.