Can KSU make a payment on behalf of the Foreign National in order to avoid taxation?
Payments made by the University to a third party on a nonresident alien’s behalf are considered payments to the nonresident alien. Therefore, the University must withhold the appropriate federal income tax, which depends on the type of payment, and report the payment to the IRS as if it had been made directly to the nonresident alien. However, expenses that qualify under either the Accountable Plan rules may be excluded from the nonresident alien’s gross income.