Why does the Non-Employee Expense Report form include the question “Is the payee a U.S. citizen or U.S. taxing resident”?
To identify whether the payee is a foreign national or a U.S. citizen/taxing resident in order to determine appropriate tax withholding/reporting, if applicable.
Am I required to attach any additional documentation to the Non-Employee Expense Report form if the payee is not a U.S. citizen or U.S. taxing resident?
Additional forms may be required for non-employee expense reports that are submitted over the 90 day requirement or do not meet all of the requirements of the Business and Travel Expense policy. If this applies, please provide one of the following:
- If the non-employee is a U.S. citizen, acquire a completed Form W-9 from the payee and submit with the expense report.
- If the non-employee is a foreign national, acquire both a completed Foreign National Information Form [.pdf] and a completed Form W-8BEN from the payee and submit with the expense report.
Will non-employee payees be taxed if they submit their expense reimbursements after 90 days?
- Non-employee U.S. citizens will not have tax withheld from any reimbursements over the 90 day requirement, but reporting to the IRS is required if the amount of the reimbursement is $600 or more.
- Non-employee foreign nationals/nonresident aliens will most likely have tax withheld from reimbursements over the 90 day requirement and IRS reporting is required on the Form 1042-S.
What information is necessary when completing a Non-Employee Expense Report form?
The Non-Employee Expense Report form must document the relationship of the individual, clearly describe the business purpose of the expenses, include required supporting documentation, and must be approved by the applicable department. Non-employees may only claim actual costs (e.g., per diem claims are not permissible).