UCSC Procedure : Vendor Payment Guideline : Honoraria

1.	Process the payment only if the 1099 vendor indicator defaults into the field or if you have the social security number provided by the individual to input into the Tax ID Field.

2.	CA STATE WITHHOLDING TAX AND REPORTING (FTB 592-B)

	A.	State tax withholding applies for services performed within California by the below listed entities if the expected total payments from UCSC will exceed $1,500 during the calendar year. Withholding amounts will be reported on the Franchise Tax Board Form 592-B at year end.
		1.	Non-California resident (US citizen or US resident alien)
		2.	Non-California partnership
		3.	Out-of-state corporation that performs services within California
		4.	Non-US citizens
		5.	Non-US companies (corporations)
		*	Any portion of the service that is performed outside of California or the United States is not subject to California withholding tax. Enter the actual location(s) where the service(s) were performed into the text field of FYAINVE. The invoice must indicate the location(s) of the vendor’s services, or the vendor may complete a CA Form 587 (Nonresident Income Allocation Worksheet). This form can be obtained from AP by calling 459-4797.

	B.	State tax withholding does not apply for services performed within California by:
		1.	California resident
		2.	US resident alien claiming California as their state of residency
		3.	California partnership
		4.	California corporation

3.	FEDERAL TAX REPORTING AND WITHHOLDING (Form 1099 Reporting):

	A.	US CITIZENS AND US RESIDENT ALIENS:
			Services performed worldwide are Form 1099 reportable only.

	B.	NON-US CITIZENS:
		1.	Services performed outside the United States are not Form 1099 reportable.
		2.	Services performed within the United States are processed as 1099 reportable payments for tracking purposes and federal tax withholding (if applicable per tax treaties). In lieu of receiving a Form 1099, the non-US citizen will receive a Form 1042S at year end.
		3.	Some or all of the forms listed below may be required for non-US Citizens for services performed within the United States. Federal taxes apply, depending on US tax treaties. Submit the forms to the Payroll Office with the required payment documentation (UCSC Direct Payment Form, Purchase Order, Contract, etc.). Please contact Payroll at 459-4208 for the forms that will be required prior to processing the payment. I-20 (Provided by traveler) I-94 Arrival & Departure Record (Provided by traveler) plus a Certificate of Academic Activity for an I-94 stamped with a B-1, B-2, WB or WT IAP-66 (Provided by traveler) 8233 Exemption from Withholding of a Non-Resident Alien Certificate of Foreign Status for Federal Tax Witholding (UC W8BEN) W-7 (Form available in business office, payroll or http://www.irs.ustreas.gov/pub/irs-pdf/fw7.pdf )
		4.	Individuals who do not qualify for a social security number (SSN) must apply for a tax payer identification number (TIN) by completing a W-7 and forwarding to the address on the form. No payment will be made until the individual is issued a TIN or SSN.

	C.	NON-US COMPANIES:
			Services performed within or outside the United States are not subject to federal tax and are not 1099 reportable.

4.	One-time vendors may not be used for a 1099 tax reportable payment.

				Pay Type 1F

				Honoraria

	Issued 00-Feb-98 Revised 28-Mar-01			Procedure: Direct Payment


Table of Contents \| Index Definition \| State w/hold Tax \| Federal Tax Decisions \| Initiating Actions \| Payment Process\| Authorization \| References


Definition: An honoraria is a payment, usually to a non-University person, granted in recognition of a special service for which custom or propriety forbids any fixed business price to be set. Honoraria are paid to persons of scholarly or professional standing invited for a speaking engagement, workshop participation or demonstration, generally in conjunction with an academic activity. For payments to a UC employee see Payment Guideline #26. Payments to all others are detailed below, including outside links to the summary tables:
	Table A: US Citizens & US Resident Aliens	Table B: Non-US Citizens

References:
Policy:		Academic Human Resources Policy Staff Human Resources Policy Honoraria Update for B-1, B-2, WB, and WT Visa Holders

Web:		FIS Manual: Direct Pay Invoice (FYAINVE) Direct Payments Quick Reference Guide Process: Foreign Visitors

Forms:		204 Form Certification of Academic Activity Form Direct Payment Form Intercampus Form

Accounts:		See Summary Table A & B

Income Type:		See Summary Table A & B