Prizes and Awards to Non Resident Aliens (NRA's)
IRS regulations require that NRA's (generally students on an F-1 or J-1 visa who have been in the United States for less than five years) who are receiving a prize/award will be subject to 30% federal withholding on the payment. Prizes/awards are amounts received by an individual primarily in recognition of religious, charitable, scientific, educational, artistic, literary or civic achievement or received as a result of entering a contest. Currently, tax treaty provisions are not available to exempt a prize/award from the 30% tax withholding. Hence, when UBF receives a Disbursement Request for a prize/award to an NRA, UBF will withhold 30% from the prize/award amount and remit it to the IRS. The balance will be issued directly to the individual. At the end of the calendar year, an appropriate 1042-S tax reporting form will be prepared by UBF and sent to the individual.