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Handbook of Business Procedures

Date published: 
Last revised: 
Issued by: 

Dec. 2, 2010
Dec. 2, 2010
Contractor Services

 

Part 12. Independent Contractors - Table of Contents


12.5.5. SERVICES PERFORMED BY PERFORMERS

A. Services Performed by Individual Performers

For a performance by an individual (or performance by a group where the individuals within the group cannot be substituted), payment requires 30 percent tax withholding unless one of the following conditions exist:

  • The Internal Revenue Service (IRS) has signed and issued an approved Central Withholding Agreement (CWA) with the specific individual prior to the performance date. The University of Texas at Austin performance venue and date must be listed in the CWA schedule of performances authorized under the CWA. The CWA must be attached to the payment voucher.

    • The IRS CWA application form must be received by the IRS at least 45 days before the first performance date covered by the CWA, or the application will be rejected by the IRS. The IRS CWA application and detailed instructions are on the IRS website.

  • The performer is a resident of one of the former Soviet Union countries or a foreign country which maintains a tax treaty with the United States exempting all income types. Treaty benefit availability is determined upon receipt of immigration documents in the Office of Accounting at least 24 hours prior to the applicant’s treaty appointment time. See Treaty Appointments to learn about the treaty benefit application process.

B. Services Performed by a Company

Treaty benefit availability is determined in the Office of Accounting during the review process. For a performance by a company (no specific individual is required to perform; it is a collective performance with possible interchangeable performers), payment requires 30 percent tax withholding unless one of the following conditions exist:

  • The payment is supported by documentation of nonprofit status (e.g., 501(c)(3)) granted by the IRS. The foreign company's certificate of U.S. nonprofit status must be provided as part of the payment voucher documentation.
  • The company is from a treaty country where a business profits tax treaty article is available, and the university has a valid IRS form W-8BEN on file for that company prior to the performance date (with the company's U.S. federal tax number). The IRS form W-8BEN must be provided as part of the payment voucher documentation.

 

 

Part 12. Independent Contractors - Table of Contents