There are no simple answers to this question. Cornell must withhold taxes on all payments to nonresident aliens unless the payment is exempt under the Internal Revenue Code, a tax treaty, or as foreign source income.
Types of Payments
- Wages: Cornell withholds federal and state taxes using graduated rates
- Tuition Fellowships: No withholding
- Other Fellowship Support: (e.g. room, board, stipends, living allowances, travel, awards, emergency funds, etc.) Cornell withholds federal taxes at 14 percent. New York State does not provided a mechanism for withholding on non-wage payments. Therefore, each taxpayer should evaluate whether to make quarterly estimated tax payments to cover the state liability
- Fee/Honorarium/Royalty: Cornell withholds federal income taxes at 30 percent. New York State does not have a mechanism for withholding on these non-wage payments
- Reimbursed Business Expenses for Employees/Short-term Visitors: No withholding