International Tax Overview
All persons receiving payments from a US source, whether they are US residents or internationals, are subject to US taxation. There are specific regulations and processes required for determining the tax withholding for international persons and various factors come into play in determining the percentage of the tax withholding. In certain situations, tax treaties may exist that exempt a person from US taxation.
The International Tax Office (ITO) is responsible for ensuring Vanderbilt University's compliance with US tax regulations as they pertain to international persons, whether they be visitors, students, scholars or employees.
There are four definitions that are important to the international tax process:
- Nonresident Alien: this is defined by US immigration laws and generally means any person who is not a US citizen, US national, US resident, asylee, refugee or permanent resident. Nonresident aliens are also called "international persons."
- US Resident: this is defined by US immigration law and generally means any person who is a US citizen, US national, asylee, refugee or permanent resident
- Nonresident Alien for Tax Purposes: this is defined by US tax regulations and simply means any international person who has not been physically present in the USA for the amount of time required to warrant treatment as a Resident Alien for Tax Purposes. The substantial presence test and/or the visa status of an international person is used to determine when this categorization ends.
- Resident Alien for Tax Purposes: this is defined by US tax regulations and simply means any international person who has been physically present in the USA for the amount of time required to warrant treatment as a Resident Alien for Tax Purposes. Resident aliens for tax purposes are taxed in the same manner as US residents. They can use the same filing statuses and claim tax allowances just as a US resident could. In addition, worldwide income must be reported
The ITO uses a secure online tax compliance software ("GLACIER") to capture the information required to determine the actual tax status of an international person. All international persons who are not US Residents (see definitions above) and who are receiving payments from Vanderbilt University are required to have a GLACIER record. Therefore, a GLACIER record is required even if an international employee, student, scholar or visitor meets the definition of a "Resident Aliens for Tax Purposes."
Use the e-mail login information to open a GLACIER record. Your department HCM will complete a Glacier Access Request on your behalf and an email will be sent to you with temporary log in credentials to access your record for the first time. You will complete your Glacier record profile and at the end there will be PDF documents that will need to be signed and returned to the International Tax Office along with copies of your immigration documents listed on your Glacier Tax Summary. Electronic signatures are acceptable. Print the forms that generate at the end of the questionnaire process. After printing the forms, sign and date them, collect photocopies of the required immigration documents and send them to the ITO.
It is important to remember to update GLACIER every time there is a change of address, or change in immigration documents (visa stamp, I-94, I-20, DS-2019, etc). Updating must continue until the international person leaves Vanderbilt or becomes a US resident.