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Prizes and Awards to Nonresident Aliens (NRAs)

IRS regulations require that Nonresident Aliens who are receiving a prize/award are subject to 30% federal withholding on the payment. Prizes/awards are amounts received by an individual primarily in recognition of religious, charitable, scientific, educational, artistic, literary or civic achievement or received as a result of entering a contest. Generally, tax treaty provisions are not available to exempt a prize/award from the 30% tax withholding. If you are giving a prize/award to an NRA, Vanderbilt is required to withhold 30% from the amount and remit it to the IRS. The NRA will receive the balance. The individual will need to create a profile in GLACIER and they will receive a 1042S tax reporting form by March 15 of the next calendar year reflecting the amount award, taxes withheld, and amount netted.