Identifying Individuals for Analysis
Federal law dictates that Towson University
determine a person's tax status for those individuals who are not U. S. Citizens or Permanent Resident Aliens.. The Internal Revenue Services has four categories of tax residency
status. These are NOT immigration categories!
- United States citizen
- Permanent resident alien
- Resident alien for tax purposes
- Nonresident alien for tax purposes
All of Towson University's payment forms ask the question: "Are you or the beneficiary of this payment a US Citizen or Permanent Resident Alien?" If the answer is no, then individuals are referred to the Nonresident Alien Tax Office for a tax analysis. The tax analysis will conclude the individual is one of the following:
Resident Alien for Tax Purposes (RA)
A resident alien for tax purposes is subject to the same tax regulations as a U. S. Citizen. Resident aliens are taxed on their worldwide income.
Nonresident Alien for Tax Purposes (NRA)
Separate tax laws regulate those who qualify as a nonresident alien for tax purposes. Nonresident aliens for tax purposes are only taxed on their “U. S. source” income.
NRA and RA definitions apply only on the federal level. The definitions and purpose do not apply on the state level in the same manner.
Determining Tax Status
- A calculation called the Substantial Presence Test (SPT) is used to
determine your tax status of RA or NRA. The key factors of
the substantial presence test is the history of U.S. visits and
immigration classification during those visits. Click
here for examples.
- Towson University uses Glacier™ to determine tax status.
- If the information required for the
Substantial Presence Test is not available, the University must by
law presume the individual is
and withhold tax accordingly.
- Any reference
to “nonresident alien” or NRA on this
website means a nonresident alien for tax purposes.