Kansas Department of Administration

99-P-022 Non-Resident Alien Earnings

Posted on October 21, 2021 at 12:50 PM by Kansas Department of Administration

DATE: January 29, 1999
SUBJECT: Non-Resident Alien Earnings
CONTACT: Nancy Ruoff (785) 296-5369
APPROVAL: Approved by Dale Brunton
SUMMARY: Clarification on Payroll Issues for Regents' Payroll System Agencies Reporting Earnings for Non-Resident Alien Employees

Effective with the implementation of SHARP v7.0 in October, 1998, Non-Resident Alien employees and 1042 earnings balances are maintained utilizing as 'vanilla' an approach to PeopleSoft as possible. Following is a clarification of certain issues that have been addressed since the implementation of SHARP v7.0.
  • Earnings for Non-Resident Alien employees should be submitted by Regents institutions using earnings codes NR4, NR5, NF4, or NF5. SHARP evaluates the employee's current 1042 balance, tax treaty limit, and current NR or NF earnings to determine the amount of earnings to be updated to 1042 balances and/or W2 balances. Once an employee has reached the 1042 tax treaty maximum eligible earnings limit for the year, the system will automatically begin updating W2 balances.
  • PeopleSoft v7.0 does not evaluate maximum presence limits for Non-Resident Alien employees. Regents institutions are responsible for determining when a Non-Resident Alien employee meets the maximum presence limit. Once an employee meets the maximum presence limit, the employee is no longer eligible for NR4, NR5, NF4, or NF5 earnings and all future earnings should be reported using REG (or another valid earnings codes). An employee's Special_FWT_Status must remain as an 'A' (Non-Resident Alien) on the maximum effective dated Fed Tax Data row for any year in which they have 1042 earnings. After an employee meets the maximum presence limit, the employee's Special_FWT_Status should be set to 'N' (None) for subsequent years.
  • It continues to be the responsibility of the Regents institutions to correctly determine the applicability of a tax treaty for any income in question and to inform the Department of Administration of any changes to the tax treaty table. Many countries have multiple treaty IDs on the tax treaty table to identify various income code/income limit/payer of income combinations. It is the responsibility of the Regents institutions to gather all of the necessary information to make the correct determination of tax exemption and treaty ID. Regents institutions should review the treaty IDs assigned to employees on a regular basis to insure the correct treaty ID is in use.
  • Non-Resident Alien employee information for country, income code, and year-to-date 1042 taxable gross is provided on the Regent's Outbound Management Reporting File (start position 5951). Regents institutions should review year-to-date 1042 taxable gross balances on a regular basis throughout the year and forward any questions regarding differences to Sunni Zentner in the Payroll Services Section at (785) 296-7058.


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