|
Some payroll deductions from wages and salaries are required by Federal Law or State Statutes or Administrative Rules. |
|
A.
|
Citizens and Residents |
| |
1. |
Federal Income Tax |
| |
a. |
The University is required to withhold for Federal Income Taxes based on the information submitted on the W-4. |
| |
b. |
Gross salary or wages less pre-tax deductions (including tax shelter annuities) and less withholding allowances plus taxable fringe benefits equals the amount subject to withholding. |
| |
c. |
One withholding allowance for an employee paid biweekly in 2009 is $140.38 per pay period. One withholding allowance for an employee paid monthly is
$304.17. Taxes are withheld at 10%, 15%, 25%, 28%, 33% and 35%. |
| |
d. |
An employee can estimate the amount of Federal Income Tax to be withheld by using the appropriate tax table.
See the Tables for Percent Method Withholding. |
| |
2. |
State Income Tax |
| |
a. |
The University is required to withhold for State Income Taxes based on the information submitted on the W-4. |
| |
b. |
Gross salary or wages less pre-tax deductions (including tax shelter annuities) and less withholding allowances plus taxable fringe benefits equals the amount subject to withholding. |
| |
3. |
Social Security Tax |
| |
a. |
Social Security Tax consists of two parts. The Old Age, Survivors, and Disability Tax
(OASDI)
at 6.2% and Medicare Tax at 1.45%. For 2009, the combined rate of 7.65% will apply to earnings up to
$106,800. As there is no limit on the Medicare Tax, the 1.45% will be taken on
all earnings. |
| |
b. |
Gross salary or wages less pre-tax deductions (not including tax shelter annuities), plus taxable fringe benefits equals the amount subject to withholding. |
| |
c. |
Wages
paid to a student employed in a student help, graduate or undergraduate
assistant position, are exempt from Social Security and Medicare tax during
periods when they are enrolled at least half time and during breaks that do not
exceed 5 weeks. See the UW System policy regarding Student FICA Exemptions.
A
Student Enrollment Verification/FICA Exemption Form must be completed and
submitted to the Payroll Office each semester. |
| |
|
1) |
If the student is a career employee, that student is not
exempt from social security taxes |
| |
|
2) |
If the student is not enrolled for credit but is enrolled in English as a Second
Language, English 090/095, or Math 090/095, the student is subject to social
security taxes. |
| |
|
3) |
If the student is enrolled for credit at least at the half time level, or is a
dissertator, or graduating at the end of the current semester, the student is
exempt from social security taxes. |
| |
|
4) |
For an undergraduate student, enrollment during the spring or fall semesters
must be at least 6 credit hours to be exempt from social security taxes. |
|
|
5) |
For a graduate student, enrollment during the spring or fall semesters must be
at least 4 credit hours to be exempt from social security taxes. |
| |
|
6) |
During the summer term, enrollment must be at least 3 credit hours to be exempt
from social security taxes. |
| |
|
7) |
Any student enrolled in the spring and returning in the fall, but not enrolled
in the summer, must pay social security taxes for all summer pay periods worked. |
| |
|
8) |
If the student was exempt from social security taxes during the fall semester
and is expected to be exempt from social security taxes during the spring
semester, the student will be exempt from social security taxes during the break
between fall and spring semester provided that the break does not exceed 5
weeks. |
| |
|
9) |
If the student was exempt from social security taxes during the spring semester
and summer enrollment is at least at the half time level, the student will be
exempt during a break in enrollment that does not exceed 5 weeks. |
| |
|
10) |
A
Student Enrollment Verification/FICA Exemption Form (Summer) must be
completed by all students employed during the summer. |
| |
4. |
Life Insurance |
| |
a. |
Unclassified employees eligible for University Insurance Association have a mandatory deduction of $24.00, which is taken on the November 1 pay check each year. |
| |
b. |
If an unclassified employee is hired after October, the mandatory deduction of $12.00 for University Insurance
Association is taken on the April 1 paycheck. |
| |
5. |
Wage Assignment, Tax Levy, and Garnishment Action |
| |
a. |
The University is required to withhold lawfully issued Wage Assignments, Tax Levies, and Garnishments. |
| |
b. |
A $3.00 service charge is assessed for each pay check reduced by a wage assignment, tax levy, or garnishment. |
| B. |
International Persons may be Resident Aliens or Nonresident Aliens for tax
purposes. (See IRS Publication
519). |
| |
1. |
In order for the University to comply with IRS regulations regarding proper
withholding of Federal, State, and Social Security Taxes, an international
person must complete a
Nonresident/Resident Alien Tax Information Request (UW1123) and a W-4
Tax Withholding Form and return these to the UW-Milwaukee Payroll Office.
Copies of applicable documentation are also required. |
| |
2. |
Resident Aliens either have been admitted to the United States with permanent immigration visas (and have a Green Card) or were admitted as nonresident aliens and have since met the substantial presence test or have applied for permanent residence. |
| |
a. |
A resident alien will have social security taxes withheld from his or her wages at the rate of 7.65%. |
| |
b. |
A resident alien has taxes taken the same as a citizen. |
| |
c. |
For Wisconsin State income tax purposes, if you are a non-immigrant, you are considered a nonresident of Wisconsin. |
| |
3. |
Nonresident Aliens should file a
W-4 Tax
Withholding Form with the status as Single or Married but withhold at the higher Single rate with one (1) allowance for both Federal and State Income Taxes. |
| |
a. |
For tax withholding purposes only, nonresident aliens, for wages and
non-qualified scholarships (Research Assistants), will have taxes calculated
based upon the following table:
Amount to add to Nonresident Alien Employee's Wages
for Calculating Income Tax Withholding Only for Wages in 2009
|
Payroll Period
Biweekly
Monthly |
Add Additional
$276.00
$598.00 |
|
| |
b. |
See the Federal Tax Withholding on Scholarships/Fellowships Paid
to Non-Resident Aliens for non-wage income unless the amounts are exemptions per treaty benefits
and applicable Treaty Benefit Forms are filed with the Payroll Office.
See Policy 7.2.3 regarding treaty benefits. |
| |
c. |
A non-immigrant alien with a J1 Exchange Visitor (Student) or F1 (Student) visa is a non-resident alien for tax purposes for the first five calendar years in the United States and wages paid during those five calendar years are exempt from social security taxes. |
| |
d. |
A non-immigrant alien with J1 Exchange Visitor (Short-term Scholar,
Professor, Researcher or Specialist) visa is a nonresident alien for tax purposes for the first
two calendar years in the United States, and wages paid during those two calendar years are exempt from social security taxes. |
| |
e. |
A non-immigrant alien with a TN (Trade NAFTA) or H1-B (Temporary Worker in a Specialty Occupation) visa must pay social security taxes on all wages. All days of presence in the United States count towards the substantial presence test for residency for tax purposes. |
| |
4. |
Four resources available from the Internal Revenue Service by calling 1-800-829-3676
or downloading from the web. They are: |
| |
a. |
IRS Publication 513
"Tax Information for Visitors to the United States" |
| |
b. |
IRS Publication 515
"Withholding of Tax on Nonresident Aliens and Foreign Corporations" |
| |
c. |
IRS Publication 519 "U.S. Tax Guide for
Aliens" |
| |
d. |
IRS Publication 901 "U.S. Tax Treaties" |
|
Questions about Federal, State, and Social Security deductions should be directed to the Payroll Department (Ext.
5804) or email. Questions regarding the mandatory life insurance deduction should be directed to the Benefits Department (Ext. 4925). |
