U.S. Tax Issues and Wenner-Gren Foundation’s Tax Reporting Requirements
Wenner-Gren Foundation grants and fellowships are considered “non-service” payments and do not represent compensation for past, present, or future services.
Your Wenner-Gren grant or fellowship is not subject to U.S. taxes if (a) you are not normally subject to U.S. taxes because of your citizenship or tax residency status, and (b) 100 percent of the research or conference/workshop activities funded by Wenner-Gren is conducted outside the U.S. However, there may be tax implications in your country of citizenship or tax residence. You may wish to seek advice from an appropriate tax advisor.
U.S. Persons and Nonresident Aliens Who Are Present in the U.S.
U.S. persons are defined as U.S. citizens, permanent resident aliens (green card holders), and resident aliens for U.S. tax purposes. Nonresident aliens are non-U.S. citizens who (a) are present in the U.S. and (b) have not met the substantial presence test to be classified as a resident alien. To determine whether you are a resident alien or nonresident alien for U.S. tax purposes, please refer to U.S. Internal Revenue Service (IRS) Publication 519, “U.S. Tax Guide for Aliens,” which describes the substantial presence test. This publication can be obtained from the IRS website at www.irs.gov.
While the information in this section provides general guidance on relevant U.S. tax issues, the Foundation cannot provide specific or binding advice on tax matters and encourages its grant and fellowship recipients to consult with an appropriate tax advisor.
U.S. Persons (U.S. Citizens, Permanent Resident Aliens, and Resident Aliens)
Wenner-Gren is not required to report to the IRS (or on tax-related forms to grant recipients) fellowship, research, or conference/workshop grant payments made to U.S. citizens, permanent resident aliens, or resident aliens. You will not receive a Form 1099 or any other tax form from the Foundation. This does not mean that your grant or fellowship is not subject to U.S. income tax. You may be required to report all or a portion of the payment as income on your annual tax return. It is the responsibility of each recipient to determine what is taxable and if/where it must be reported.
IRS Publication 970 (“Tax Benefits for Education”) and Publication 54 (“Tax Guide for U.S. Citizens and Resident Aliens Abroad”) provide information on the tax treatment of grants and fellowships and can be obtained from the IRS website at www.irs.gov.
U.S. citizens, permanent resident aliens, and resident aliens may also have U.S. tax withholding and reporting obligations if any payments are made to or on behalf of nonresident aliens present in the U.S. as part of their research or conference/workshop grant. (Nonresident aliens are generally non-U.S. citizens who do not hold a green card.) If your budget includes payments to or on behalf of a nonresident alien present in the U.S., we suggest you consult with your academic institution regarding possible tax implications. Under these circumstances, we strongly advise that your grant or fellowship be paid to and administered by your academic institution. For more information, please see IRS Publication 515, “Withholding of Tax on Nonresident Aliens and Foreign Entities,” which can be obtained from the IRS website at www.irs.gov.
Nonresident Aliens Who Are Present in the U.S.
Grant and fellowship payments covering expenses for nonresident aliens while present in the U.S. are reported both to the IRS and to the nonresident alien, on Form 1042-S. Nonresident aliens are required to file a U.S. income tax return on Form 1040-NR or 1040-NR-EZ. Generally, grant and fellowship payments are also subject to tax withholdings. (If a U.S. academic institution is administering the grant or fellowship, that institution is responsible for withholding taxes and issuing the tax forms.)
Non-U.S. persons should enter the U.S. under an F (Student) or J (Exchange Visitor) visa for U.S. tax purposes. In most situations, the Foundation must withhold U.S. taxes at a rate of 14 percent on payments made to F and J visa holders on the portion of their grant or fellowship that covers activities in the U.S. Special rules apply to F and J visa holders, however, where it may be possible to reduce the tax withholding below 14 percent or in some cases completely eliminate it. If this situation applies, the Foundation will contact the recipient and provide further information.
If a non-U.S. person enters the U.S. under a different visa, for example a B (Business or Pleasure Visitor) visa, taxes are withheld at 30 percent on the portion of the grant or fellowship that applies to the U.S. visit. There are no special procedures to reduce this tax withholding obligation.
IRS Publication 519, “U.S. Tax Guide for Aliens,” provides additional information on U.S. tax issues for nonresident aliens and can be obtained from the IRS website at www.irs.gov.