A department intends to provide the visiting scholar with a non-salary stipend compensation. What is the process?
If a department intends to provide a non-salary stipend for supplemental research expenses to the visiting scholar, a Stipend Addendum form must be completed but only after a visiting scholar arrives on campus. The department routes the completed form along with a new Official Visitor Agreement Cover Sheet and Routing Form and a previously approved OVA to ORC&S so the signature of VP for Research can be obtained.
The purpose of the Stipend Addendum is to ensure there is only one contract with a visiting scholar and multiple agreements are not put into place that are inconsistent or contradict each other.
The stipend should either be a one-time payment or monthly. An hourly or weekly stipend should not be offered. US citizens are responsible for their taxes. However, for non-resident aliens, MSU is required to withhold 30% federal income tax on payments unless there is a tax treaty that allows to withhold at a lower, or no rate. If a tax treaty is utilized, there are additional forms to collect.
For more info on the process, please reference the MSU Office of the Controller and Treasurer information on nonresident alien payments here: Office of the Controller and Treasurer - Mississippi State University (msstate.edu)
The department should have the country of residence information available. If there is a tax treaty with the country which will remove or reduce MSU’s withholding obligations, Forms 8233 and W8-BEN, as well as an ITIN from the visiting scholar will be needed. If there is no tax treaty, a Form W8-BEN will be needed to set the visiting scholar up as a vendor and MSU will withhold 30% federal income tax on their income.
The stipend compensation cannot be processed until the status of the tax treaty is known and whether or not income tax is required to be withheld.
MSU (P&C) will process the stipend compensation through A/P if signed by a VP.