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CVCC Policies

6. Business Affairs, Facilities and Equipment

6.1 Use of State Property

The use of state property and/or equipment for personal gain is not permitted according to state statutes. Any individual who becomes aware of such activity is required to report such activity to the appropriate Vice President.

CVCC students and employees may utilize certain bulletin boards designated by the President (or designee) to advertise the sale of used personal items. The President (or designee) shall establish procedures and guidelines for such usage.

» 6.1 Use of State Property Procedure - Bulletin Boards
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6.2 Use of CVCC Facilities (including multipurpose fields) Approval, Fees, Appropriate Use

CVCC and CVCC-sponsored activities shall receive first priority in the reserving of CVCC facilities in most cases. When facilities are available, CVCC welcomes use by community groups and organizations. Certain facilities specified by the President or designee may be used by students, faculty, staff, and others in accordance with the CVCC Policy #4.4 regarding Free Speech, Public Assembly, and Distribution/Petitioning.

Scheduling of CVCC facilities will be done on a first-come, first-serve basis after CVCC and CVCC-sponsored activities are scheduled. CVCC does not discriminate on the basis of race, religion, color, creed, national origin, sex, age, or disability. Approval to use College facilities is not an endorsement by CVCC of the user’s organization or group. CVCC reserves the right to deny usage to any group or organization if there is reason to believe that such use would interfere with CVCC’s educational mission, operations, or functions.

Each group, organization, or individual desiring to use the facilities must obtain approval for usage in accordance with timelines and procedures established by the Chief Financial Officer or designee. CVCC facilities may be used only for purposes approved in accordance with these established procedures. CVCC reserves the right to change assigned facilities/rooms or cancel a reservation if an emergency or urgent need justifies such a change. Every effort will be made to suitably accommodate the affected group should such a situation arise. An agreement for use of facilities may not be transferred or assigned to any other person or agency without the consent of CVCC.

» 6.2  Regulation Regarding Use of College Facilities Procedure 
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6.3 Foreign Nationals Compliance Policy

Introduction

Catawba Valley Community College (CVCC) has the responsibility of withholding and reporting payments to foreign nationals (employees, contractors, vendors and students) in accordance with the IRS Code Regulations Section 1441 and with policies established by the Office of the State Controller.

It is the responsibility of CVCC to gather all data for each individual who is to be tracked through the Windstar (Tax Navigator) software and forward it to the North Carolina Community College System (NCCCS) using the Foreign National Information System (FNIS) Data Gathering Form.

Definition

A foreign national is "a person who was born outside the jurisdiction of the United States, is a citizen of a foreign country, and has not become a naturalized United States citizen under United States law. This includes legal permanent residents; also known as permanent resident aliens."

Policy

The reporting and withholding of taxes associated with payments made to non-U.S. citizens by universities, community colleges, and other agencies of the State of North Carolina are in accordance with the laws and regulations of the U.S. Citizenship and Immigration Services (USCIS) and the Internal Revenue Service (IRS). The U.S. Citizenship and Immigration Services define what payments may be made to aliens who perform services in the United States. The Internal Revenue Service defines which payments made to aliens are reported and subject to taxes, as well as establishes the tax rates for those payments.

Note: Although the preferred term for identifying a person who is not a U.S. citizen is ―Foreign National‖, the Internal Revenue Service and the U.S. Citizenship and Immigration Services use the word ―alien‖. Therefore, all non-U.S. citizens will be referred to as ―aliens‖ in this text to minimize confusion with the federal government publications.

The Type of Payment

The type of payment made to the alien falls into four primary categories:
1) Dependent personal services: Wages, service related scholarship/fellowship/assistantship payments, travel reimbursements;
2) Independent personal services: Consulting fees, guest speaker, honoraria
3) Scholarships/Fellowships:
a) Qualified component (for degree candidates): Educational expenses, tuition, fees, books, etc.
b) Nonqualified component: Living expenses, stipend, housing allowances
4) Miscellaneous Income Types: Prizes and awards, royalties, etc.

The “Source” of the Income

As important as the recipient’s tax status, the payor of the income and their residence also has bearing for determining U.S. federal reporting and taxation.
A resident alien’s income is generally subject to tax in the same manner as a U.S. citizen. Therefore, worldwide income is reported.
A nonresident alien is usually subject to U.S. income tax only on U.S. source income. The U.S. source payor is responsible for reporting income paid to the nonresident alien.
 
A determination is made as to the source of income in the following manner:
• For compensation paid to employees and independent contractors, income is sourced to the country where services are performed.
• For non-compensation payments such as scholarships/fellowships, grants, prizes, and awards, the source of the income is the residence of the payor regardless of who actually disburses the funds. If the activity is performed outside the United States, it is not considered U.S. sourced income.

Payment subject to Income Tax Withholding

Income paid to a resident alien follows the same withholding tax rules as U.S. citizens. The federal withholding rates for resident aliens are the same as rates for U.S. citizens.

Payment subject to Social Security and Medicare Taxes (FICA)

All aliens, regardless of resident or nonresident tax status are subject to the same social security and Medicare taxes for wages as U.S. citizens. Wages earned in the employment groups as defined by the Federal Insurance Contribution Act is the income subject to these taxes.

Determining if a Payment is Reportable and How to Report It

Resident alien payments are reported to the federal government in the same manner as U.S. citizens. Forms issued to the resident alien regarding reportable income are the Form W-2, Wage and Tax Statement for wages and the various Forms 1099 for non-wage compensation. Note: If the resident alien uses a tax treaty, he will receive a Form 1042-S for tax reporting purposes.
Nonresident alien payments subject to taxes are reported to the federal government. Forms issued to the nonresident alien are Form W-2, Wage and Tax Statement for wages subject to income taxes and/or FICA taxes and the Form 1042-S, Foreign Person's United States Source Income Subject to Withholding for non-wage compensation. Form 1099 cannot be issued to nonresident aliens.


Foreign Entities


Withholding of Tax on Foreign Entities other than Individuals

The reporting and withholding of taxes associated with payments made to non U.S. entities, besides individuals by universities, community colleges, and other agencies of the State of North Carolina, are in accordance with the laws and regulations of the Internal Revenue Service (IRS).

The Payee - Tax Residency Status

Nonresident alien (NRA) withholding applies only to payments made to a payee that is a foreign person. It does not apply to payments made to U.S. persons. The types of foreign entities besides nonresident aliens that receive income from U.S. payors include foreign corporations (with or without U.S. branches), foreign partnerships, foreign trusts, foreign estates, foreign governments, and international organizations. Payments made to U.S. agents of foreign persons are subject to NRA withholding.
To determine if a non-U.S. entity is classified as a foreign person use the following Standards of Knowledge:
(1) Actual Knowledge of the status of the Payee, or ―reason to know (i.e., information on the status of the payee is available if a reasonable effort is made to secure it);
(2) Documents presented by, for, or about the payee;
(3) The filing of a withholding certificate by the payee (Forms W-8BEN, W-8ECI, W-8EXP, W-8IMY, 8233, or W-9); or
(4) Presumption Rules: The regulatory presumptions listed at Treas. Reg. 1.1441-1(b) (3) (iii) et seq..

The Income Subject to NRA Withholding

Generally, a payment is subject to NRA withholding if it is from sources within the United States and it is either:
Fixed or determinable annual or periodical (FDAP) income, or
Certain gains from the disposition of timber, coal, and iron ore, or from the sale or exchange of patents, copyrights, and similar intangible property.

Specific examples of FDAP income as well as income that are not subject to NRA withholding are found in IRS Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

This income falls into one of two categories:
Effectively connected income. Generally, when a foreign person engages in a trade or business in the United States, all income from sources within the United States other than fixed or determinable annual or periodical (FDAP) income is considered effectively connected with a U.S. business. FDAP income may or may not be effectively connected with a U.S. business. Or,
Income not effectively connected. A payment is subject to NRA withholding if it is U.S. source income and it is either FDAP or certain gains.

Withholding Requirements

Different kinds of income are subject to different withholding requirements.

Effectively Connected Income:

Foreign persons are generally subject to U.S. tax at a 30% rate on income they receive from U.S. sources. For exceptions to the 30% withholding, refer to the IRS Tax Schedule. ECI is taxed after deductions at single or married filing separately rates. A nonresident alien cannot claim the standard deduction and with few exceptions, can claim only one personal exemption. ECI taxable income is reportable on the Form 1042 and Form 1042-S.

Income Not Effectively Connected:

Foreign persons are generally subject to U.S. tax at a 30% rate on income they receive from U.S. sources. For exceptions to the 30% withholding, refer to the IRS Tax Schedule.

For additional information, these policies are posted on the Office of State Controller’s web site at: http://www.osc.nc.gov/Foreign_Nationals/Foreign_Nationals_Information.html


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Updated 07.30.2014: Employment