Foreign Source Payments

Instructions for honorarium payment to non-US contractors providing services outside of the US.

When paying a non-US contractor for independent services, it is important to define the location where the activity took place. The source of the income is the place where the vendor/contractor performs the service or earns the income for which they are being compensated.

"Foreign source income" is income for services performed outside the United States. Only US source income is reported and subject to withholding by the IRS depending on the availability of a tax treaty. Foreign source income is neither reportable nor subject to withholding by the IRS.

An example of foreign source income would be, the honorarium paid to an Italian lecturer located in Italy for a one-hour Skype class. In this case, the lecturer performs the services outside of the United States and is not a US citizen or permanent resident. It assumes that the lecturer is a contractor and not an employee of the college.

For such payments, please ask your visitor to fill out the form for "Foreign Source" (below) and attach it to your Check Request when you submit it to Accounts Payable.