GLACIER and Tax Withholding on Student Accounts

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GLACIER and Tax Withholding on Student Accounts

• University of Arizona
• FSO-Tax Compliance
• March 2008

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Who are taxed on Student Account
With Treaty Exemption
No
Nonresident Aliens For Tax Purposes
Without Treaty Exemption
Taxed
Foreign Students
Resident Aliens For Tax Purposes
No
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What can GLACIER do?

• GLACIER determines a foreign student is
• Resident Alien or Nonresident Alien for tax
  purpose
• Qualified for treaty exemption or not
• Then we can determine whether we should tax the
  student

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Who Is Required to Use GLACIER

• Tax Compliance identifies students required to
  use GLACIER
• -- Coded as Foreign Student in SIS Screen 7
  , and
• -- Receive scholarship/stipend awards that
  exceed tuitions and required fees
• GLACIER administrator sends out an email through
  GLACIER to the student with login information

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GLACIER Tax File Status

• I student has not done any input in GLACIER
• W student has input information in GLACIER,
  but has not submitted the required tax forms and
  documents
• C student has input information in GLACIER,
  and submitted tax forms documents. The file is
  coded complete by a GLACIER administrator
  (Payroll, ISPS and Tax Compliance)

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Z flag in SIS

• SIS screen 4, field 11
• If the students GLACIER status is I or W,
  Tax Compliance places the Z flag on field 11
  to stop any funds from being released
• When the students GLACIER status is coded as
  C, Tax Compliance removes the Z flag
• Tax Compliance keeps track of the GLACIER status
  and removes Z flag as soon as possible

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Coding Student for Tax Withholding in SIS

• Screen 4, field 20
• Value is blank student is not subject to tax
  withholding (because he is NOT a foreign student,
  is a resident alien for tax purpose, or a
  nonresident alien with treaty exemption)
• Value is N student is subject to tax
  withholding (nonresident alien student without
  treaty exemption). Funds will not be released if
  the value is N
• Value is Y student who is subject to tax
  withholding, has been assessed tax for the
  release of the funds. The batch check/ACH will be
  released overnight, and the value will be
  replaced with N the next day automatically.

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How does it work?

• SIS Edeposit5 report a daily report that
  pulls out students who
• Are coded as foreign student
• Have a N flag on screen 4, field 20
• Have a credit balance
• These are the students we need to check in tax
  calculation program before the funds can be
  released

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How to calculate the tax?

• ISW International Student Tax Calculation Program
  an automatic program to calculate YTD
• Total Taxable (scholarship) Income
• Total Tax Amount
• Total Taxed To Date
• Net Tax to Apply

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How does the program work?

• What transactions are included in the
  calculation?
• (A) Tuition charges and required fees to attend
  the class or the University
• (B) Tuition waivers/remissions, stipends, and
  scholarship awards
• Total Taxable Income (B)- (A)
• Tax Rate 14 mostly, 30 in some case, depending
  on students visa type

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More to Know

• Students receiving cash awards do not have to be
  taxed if the awards plus waivers are less than
  the tuitions and require fees no taxable income
• Total Taxable Income is subject to change during
  the year depending on the timing of charges and
  awards are posted

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Who does the tax withholding

• Bursar A/R assesses tax for batch checks/ACH
  transfers, based on the daily E-deposit 5 report
• Bursars representatives assess tax on manual
  refund checks issued to walk-in students
• Tax Compliance periodically reconciles the
  taxable income and taxes

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Role of ISPS (International Students and Programs
Service)

• ISPS does not place or remove Z flag on field
  11, or N flag on field 20
• ISPS does not withhold tax on students account
• ISPS acts as liaison for Tax Compliance and
  International Students for questions regarding Z
  flag on field 11 N flag on field 20, and tax
  being withheld on scholarships

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Summary Who does What

• Tax Compliance determines what is taxable (ISW
  international Tax Calculation Program), who
  should use GLACIER, who should be taxed (N flags
  on field 20), and replaces removes Z flag on
  field 11
• Bursar charges applicable taxes and disburses
  funds
• ISPS acts as liaison to answer students
  questions regarding tax withholding, N flag or Z
  flags receives tax documentations