employer handbook - Council on International Educational Exchange

d. Box 4: Leave blank.
e. Box 5: Enter “1”. There are no
exceptions to this.
f. Box 6: Write “NR” to indicate
Nonresident Alien status.
g. Box 7: Leave blank. Nonresidents
cannot claim “Exempt”.
h. Box 8 – 10: Leave blank.
i. Sign and date the form.
Additional Withholdings:
Federal Withholdings for
Work & Travel USA Participants
The Internal Revenue Service has new
procedures for calculating the amount
of federal income tax withholding on
the wages of nonresident aliens like
CIEE sponsored Work & Travel USA
participants. Nonresident aliens are no
longer required to request additional
withholdings in Box 6 on Form W-4.
Instead of this requirement, <strong>employer</strong>s
are required to apply a new procedure.
Under this procedure <strong>employer</strong>s add an
amount to the nonresident participants
wages as described on pages 15-16 of
the IRS Publication 15, Circular E (Re-
vised January 2008 http://www.irs.gov/
pub/irs-pdf/p15.pdf) for calculating the
income tax withholding for each payroll
period. Please note, the amounts added
under this chart are added to wages
solely for calculating income tax withholding.
Chart amounts should not be
included in any box on the employee’s
Form W-2 and does not increase the income
tax liability of the employee.
Example
Following is an example that illustrates
the Additional Withholdings procedure
change. This example uses the
Wage Bracket Method for calculating
federal withholdings and is the most
common method used by <strong>employer</strong>s.
Please be aware that if you use the
Percentage Method for calculating
withholdings CIEE recommends that
you contact the IRS or a tax professional
if you have questions.
NOTE: The table referred to in this example
can be found in the IRS Publication
15, Circular E (Revised January
2008) (http://www.irs.gov/pub/irs-pdf/
p15.pdf) on page 36.
• Work & Travel USA participant earns
$500.00 in one week.
• Employer pays employees on a
weekly basis.
• The <strong>employer</strong> adds $51.00 to the
participant’s wages.
• The taxable amount becomes
$551.00.
• Employer scrolls down the weekly
payroll table and finds the range
the student’s wage falls into.
In this case it is between $550.00
and $560.00
• Employer scrolls across the top
of the payroll table and locates
the column for one withholding
allowance. J-1’s always are allowed
only one allowance.
• Employer finds intersection at
$59.00 and that is the federal tax
withholding.
• Participant’s wages after federal
withholding is:
$500.00 - $59.00 = $441.00
Legal Opinion: J-1 Visa Holders and Social Security
February 13, 2004
Stevan Trooboff
President and Chief Executive Officer
<strong>Council</strong> on International Educational Exchange
Dear Stevan:
• Important: We are now using
the participant’s actual wage at
this step!
• Employer will still need to calculate
applicable state and local taxes.
After Your Workers
Return Home
International participants that worked
at your business during the year will
need a W-2 Form in order to file their
US tax returns. We recommend that
before your workers depart for their
home countries, you confirm with
them the best address to which these
forms should be sent. This extra step
will help to avoid frustration come
next tax season.
CIEE recommends www.taxback.com
for participants who are seeking assistance
with their tax returns.
You have asked me to determine whether J-1 visa holders may commence work
with their <strong>employer</strong>s if they have not yet received a social security number or
card. I am pleased to report that the Internal Revenue Service’s (IRS) regulations
clearly permit such employees to commence working before they have
received, or even applied for, their social security cards from the Social Security
Administration (SSA).
The Federal Insurance Compensation Act (FICA) exempts J-1 visa holders from
paying social security taxes. 26 U.S.C. § 3121(b)(19) (2000). The requirement that
each such employee obtain a social security number is for the <strong>employer</strong>’s re-
16 <strong>Council</strong> on International Educational Exchange Work & Travel USA
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