payroll services / Section 4.5 & 4.6
4.5 UAB Office of Student Financial Aid:
Student scholarships/fellowships shall be awarded by the UAB Office of Student Financial Aid. The UAB Office of Student Financial Aid shall disburse only that portion of a student scholarship/fellowship payment that is not subject to federal income tax withholding under Section 3.1 of this Guide. See Sections 1.3, 2.3, and 4.4 of this Guide for additional compliance responsibilities.
4.6 UAB Payroll Department:
The UAB Payroll Department shall be responsible for issuing all employee compensation income payments referred to in Section 2.2 of this Guide, and the portion of student scholarship/fellowship income payments that is subject to federal income tax withholding under Section 3.1.2 of this Guide. The UAB Payroll Department s compliance responsibilities are specified in Sections 1.3, 2.2-2.4, 3.1-3.4, 4.4, and 4.6 of this Guide.
4.6.1 IRS Form 1042 and IRS Form 1042 S:
The UAB Payroll Department is responsible for preparing and timely filing IRS Form 1042 (including the attachments thereto) and IRS Form 1042S with respect to all income payments to nonresident aliens. However, to the extent that all or a portion of a payment is not covered by a tax treaty and is subject to federal income tax withholding pursuant to IRS withholding tables, an IRS Form W-2 shall be used to report such payment, not an IRS Form 1042S.
The UAB Payroll Department also is responsible for reporting payments to resident aliens on IRS 1042 and IRS Form 1042S when appropriate (see the heading Tax Residency Tests in Section 4.4.1 of this Guide). For example, a payment to a resident alien employee that is covered by a tax treaty should be reported on IRS Form 1042S.
4.6.2 Transmission of Withholdings and Payments:
The UAB Payroll Department shall be responsible for reporting and transmitting all tax withholdings and tax payments to the appropriate federal, state, city, and county tax authorities.
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