**INACTIVE POLICY**

For Current Policies:
Policy Table of Contents

 

                      UNIVERSITY OF VIRGINIA
           FINANCIAL AND ADMINISTRATIVE POLICIES MANUAL



TITLE:  PAYROLL:  TAXES                            POLICY:  XII.F.1x
                                                
    
NOTE:  THE PAYROLL DEPARTMENT CANNOT GIVE TAX ADVICE TO ANY
EMPLOYEES.  IF EMPLOYEES NEED TAX ASSISTANCE, THEY SHOULD CONTACT
THE IRS OR SEEK THEIR OWN TAX OR LEGAL COUNSEL.

Tax Forms

All employees must complete a W-4 and a VA-4 Form.  The W-4 Form is
used to claim withholding for federal income tax. The VA-4 Form is
used to claim withholding for state income tax.  Withholding
allowances determine how much income tax is withheld from each
paycheck.

Employees may obtain these forms from their Departmental Payroll
Contact. Departments, in turn, may obtain these forms from General
Stores.

New Hires

New wage employees must complete and return a W-4 and a VA-4 Form
to their department.  The department should then staple the tax
forms to the Wage Employee Form and submit them to the Payroll
Department.

New classified and faculty salaried employees will be given these
forms for completion during their Benefits Orientation Meeting.

Changing Tax Information

If an employee wants to change their withholding, a new W-4 and/or
a VA-4 Form must be completed and returned to the Payroll
Department.

During the year, an employee may change their withholding, but any
such changes will be processed according to normal payroll
schedules.

Exemption From Withholding

Employees can claim exemption from income tax withholding, if they
meet IRS guidelines.  Information on claiming exemption from
withholding can be found on the tax forms.  By claiming this exempt
status, no federal or state taxes will be withheld.

Mandatory Renewal of Exemption From Withholding

The exempt status expires at the end of the calendar year.  Each
calendar year, employees must file new tax forms to claim the
exempt status. A new VA-4 form must be filed before December 31 and
a new W-4 must be filed before February 15 in order to maintain an
exempt status for the upcoming calendar year.

If an employee's exempt status is not renewed, the University must
begin withholding income taxes, and NO refunds will be given by the
Payroll Department.

Overwithheld Income Taxes

As an employer, the University is required to withhold income taxes
from an employee's paycheck according to the employee's W-4 and VA-
4 forms.  It is the employee's responsibility to complete these tax
forms and to do so correctly.

If an employee fails to complete the forms, and if income taxes are
overwithheld as a result, the Payroll Department WILL NOT refund
any of the taxes withheld.

The employee can obtain a refund of any overwithheld income taxes
when filing their annual income tax returns.

Exempt FICA Status of Full-Time Students

University of Virginia students who are FULL-TIME students but who
work for the University as PART-TIME employees are exempt from
paying the Social Security (FICA) tax.  This exemption only applies
to students enrolled at UVA. Non-UVA students that are employed by
the University are required to pay FICA tax (e.g., Piedmont
Virginia Community College Students).

NOTE:  Full-time Clinch Valley College students working part-time
for the college are also exempt from paying Social Security (FICA)
tax.

As specified in the University Human Resources Policies and
Procedures Manual (Policy 311.000), regular session full-time
University of Virginia students are:

 Graduate students taking nine or more credit hours who are
 enrolled in a degree-granting program.
 
 Undergraduate students taking 12 or more credit hours who are
 enrolled in a degree-granting program.

During summer session, full-time University of Virginia and Clinch
Valley College students are:

 Graduate students taking six or more credit hours who are enrolled
 in a degree-granting program.

 Undergraduate students taking nine or more credit hours who are
 enrolled in a degree-granting program.

It is the department's responsibility to code students correctly on
the Wage Employee Form.  For those students exempt from FICA
withholding, use object codes:

     23200 (weekly wage), or

     24100 (monthly wage).

Also use a FICA status code of:

     1 for U.S. citizens, or

     2 for foreign nationals.

If a student is employed by the University during the summer and is
NOT enrolled in summer session for the appropriate number of hours,
he/she is subject to the FICA tax.                                 
ISSUED BY:                                                 03/12/92
Assistant Comptroller for
Accounting Operations          12.6.1.3 
                         
A full-time UVA student who is also a full-time employee of the
University is not exempt from paying FICA tax.  In this situation,
the University considers the person's major function to be a full-
time employee.

FICA Status of Foreign Nationals

Employees who are foreign students or scholars holding an F-1
(student) or J-1 (exchange visitor, researcher, or professor) visa
status, do not pay social security tax when they first arrive.  J-1
and F-1 students are exempt from FICA for five years; J-1 visitors
are exempt from FICA for two years.

All other aliens pay social security tax, if their employment comes
under the social security system.

Income Tax Status of Foreign Nationals

The Payroll Department cannot give tax advice to any employee,
including foreign national employees.  Aliens should contact the
IRS or seek assistance from tax or legal counsel.

Due to the number and complexity of U.S. tax treaties and laws, it
is recommended that aliens refer to the following IRS publications:

     Publication 515   Withholding of Tax on Nonresident Aliens

     Publication 519   U.S. Tax Guide for Aliens

     Publication 901   U.S. Tax Treaties


ISSUED BY:                                                06/23/97 

Associate Comptroller for
Accounting Operations          12.6.1.1