UNIVERSITY OF VIRGINIA
          FINANCIAL AND ADMINISTRATIVE PROCEDURES MANUAL



TITLE:  COMPLETING IRS FORM W-4 FOR              PROCEDURE:  12-61
        FOREIGN NATIONAL INDIVIDUALS
                                                                  
Policy Reference:              XII.F.3, also IV.G.2, VI.A.5

Form:                          IRS Form W-4

Obtain Blank Forms From:       Fiscal Administrators, page 12.61.3
                               or Payroll Department.  Make copies
                               as needed.

Forward Completed Forms To:    Payroll, Carruthers Hall


Purpose

To provide foreign national individuals information on how to claim
proper withholding for federal tax purposes.

Instructions

For "Green" card resident aliens or resident aliens by virtue of
the Substantial Presence Test--follow instructions on the W-4 form,
as would a U.S. citizen.   

For nonresident aliens, follow instructions below:

1.    Ignore the "Personal Allowances Worksheet."

2.    On the W-4, complete lines #1 and #2 as indicated.

3.    Check only the "Single" marital status on line 3 (regardless
      of actual marital status).

4.    Claim only ONE withholding allowance on line 5 (regardless of
      whether any of their dependents are US citizens), unless the
      individual is a resident of Canada, Mexico, Japan, or South
      Korea.

 IF A RESIDENT OF CANADA OR MEXICO, one may claim an additional
 allowance for a spouse, if the spouse is not the dependent of
 another U.S. taxpayer, and if the spouse has no taxable income
 from U.S. sources.

 IF A NATIONAL OF JAPAN OR KOREA, one may take additional
 allowances for a spouse and dependent children who live with the
 individual in the U.S. at some time during the tax year, if the
 spouse or children do not have U.S. source income and are not
 claimed on someone else's U.S. tax return, and the                                                                   
     individual is earning ONLY U.S. source income effectively
     connected with U.S. trade or business.

     If a RESIDENT OF INDIA, students from India can claim an
     additional withholding allowance for their spouses and
     dependents not admitted to the United States.

5.    The individual must request an additional tax of $8.00 per
      bi-weekly pay period be withheld on line 6, if they are paid
      biweekly; 17.33 if paid monthly.  (NOTE: STUDENTS FROM INDIA
      are NOT REQUIRED to request this additional withholding).

6.    DO NOT claim "Exempt" withholding status on line 7,
      regardless of how much the foreign national is making.  

      NOTE: To claim treaty benefits (to claim "exempt" on the W-
      4), nonresident aliens must come in-person to the Payroll
      Department (or Foreign National Tax Office), Carruthers Hall. 
      To claim "exempt" on the W-4 does not, by itself, guarantee
      that the individual will receive tax treaty benefits.  Doing
      so will result in underwithholding of taxes, and a tax
      liability at the end of the year.  

      NOTE: The IRS has notified the University Payroll department
      that if it discovers an individual has unlawfully claimed
      "Exempt" on the W-4, Payroll may then withhold the maximum
      amount of taxes from the individual's payments.  This means
      that the individual will be taxed at Single rates, with zero
      allowances.

7.    The individual must sign and date the W-4 where indicated.


See also Policy XII.F.3, "Payroll:
Foreign National Individuals."

See also Procedure 12-60, "Completing
Alien Information Request
Form (Side 1) and Substantial Presence Test (Side 2)."

See also Procedure 12-62, "Virginia
Department of Taxation Form VA-
4 for Foreign National Individuals."

See also Procedure 12-63, "Completing IRS
Form 8233 For Foreign
National Individuals."

See also Procedure 12-64, "Completing IRS
Form 1078 For Foreign
National Individuals."
                                                                   
ISSUED BY:                                                 06/23/97

Assistant Comptroller for 
Accounting Operations          12.61.2