FMO Newsletter-February 2025

This issue of the Financial Management Office Newsletter includes information about the following:

The Financial Management Office Newsletter is distributed monthly.  Should you have any questions about this newsletter, contact Amy Kunz via email: amykunz@hawaii.edu.

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Update from Associate Vice President/Controller

Target Audience: All

Thank you for all your hard work, especially during these past weeks. We know you are working hard to keep up with the daily tasks while also managing any stress added by the recent Presidential Executive Orders. 

I know that we are navigating some particularly volatile times right now. These uncertainties can be challenging, but FMO is committed and is here to support you.  Together we can adapt and navigate these challenges.

Looking ahead, FMO is focused on hiring and training staff in General Accounting and Fiscal Services, implementing the reorganization of the Bursar’s office, and developing specifications and performing testing as it relates to the conversion to Kuali-in-the-cloud in 2026. 

FMO appreciates the work that you do in the field.  Thank you again for your hard work and commitment. As always, please reach out for assistance or suggestions on newsletter or Townhall topics that would assist in your work. 

I can be reached at amykunz@hawaii.edu.

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Withholding Federal Tax on Reimbursement Payments to Non-U.S. Citizens

Target Audience: Fiscal Administrators and Staff

The IRS has established regulations relating to federal tax withholding at 30% for reimbursement payments to individuals who are non-U.S. citizens.

For example, if an individual with no employment status, is a non-U.S. citizen and is invited to serve as an external examiner for the dissertation defense of a UH student, 30% federal tax will be withheld when reimbursement for travel expenses is processed.  The individual reported on the UH Form WH-1 that they were a non-U.S. citizen and were not employed by any company or institution.  Additionally, the individual stated they did not have a U.S. Taxpayer ID number (SSN/ITIN).  Based on these facts, this individual’s UH travel reimbursement was taxed at 30%.

Conversely, a professor from Japan, would have no tax withheld because the professor reported they were an employee of another university.  Travel reimbursable expenses would be considered as related to his employment and not considered income.  Therefore, no withholding of tax is necessary.

Further, it should be noted that the source of funds, does NOT make a difference in the application of the 30% federal tax on non-U.S. citizens.  The deciding factor is employment.  If the documentation submitted shows that the individual is not employee at UH or elsewhere, the reimbursement of travel expenses is considered income pursuant to IRS regulations and must be taxed.

Should you have any questions on this topic, please contact Kenneth Lum at kenlum@hawaii.edu.

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