Tax Reporting & Compliance FAQs
- What is UC Davis’s tax status and federal tax identification number?
- UC Davis is a tax exempt 501(c)(3) organization and was formed by Article IX, Section 9 of the Constitution of the State of California.
The federal taxpayer identification numbers (TIN) assigned by the Internal Revenue Service is 94-6036494.
- What is UC Davis’s California tax identification number?
- UC Davis’s state taxpayer ID assigned by the state is 935-0501-4.
- What is UC Davis’s sellers permit number?
- UC Davis’s sellers permit number is SR-Y-JHF-29-047481.
- If I am processing a document that will impact the TR&C accounts, is it helpful if I include the project code associated with my department program/ employee?
- Please do not include project codes when impacting the TR&C accounts.
Information for Employees - General
- How can I update my tax withholding?
To update tax withholding, log into UCPath> Income and Taxes.
- Can I get a copy of past W-2 forms?
- Yes, you can obtain copies of a past W-2 by logging into At Your Service. W-2s issued after the campus transition to UCPath will be available through the UCPath portal. To enroll in UCPath W-2 online access please navigate to: Income and Taxes > Enroll to receive online W-2.
- I didn’t update my tax withholding in time and more income tax was withheld than I wanted. Can I get a refund of the extra withholding?
- No. Taxes withheld from paychecks are remitted to the tax authority on your behalf at the time of withholding. However, you can adjust future withholding. If you believe over withholding occurred due to UCPath error, please submit a case to the UCPath Center through the self-service UCPath portal. UCPath colleagues will review your record and reply.
- I believe that the tax withholding on my paycheck is not correct. How to I request a review of the withholding?
Submit a case to the UCPath Center through the self-service UCPath portal. UCPath colleagues will review your record and reply.
- Why are prizes and awards given to employees taxed?
- The IRS has provided very clear guidance that prizes and awards are considered supplemental wages subject to income tax withholding, OASDI, and Medicare. Reference can be found in IRS publication 15,Supplemental Wages. Specific UC and campus guidelines are available here
Information for Employees - Out of State
- I am not a California resident but I am working in California. Why is the university withholding California income tax?
- The State of California requires us to withhold income tax on all income earned in California. This requirement is independent of where the employee resides. You can adjust your California withholding by logging into UCPath > Income and Taxes > CA State Withholding (DE-4).
- I am in California because my spouse is on active military orders. I qualify to claim another state of residency because of the Military Spouses Residency Relief Act (MSRRA). What is the university process for claiming MSRRA?
- If you are claiming exempt because you are eligible for the Military Spouses Residency Relief Act (MSRRA) you may update out of state withholding by logging into UCPath >Income and Taxes > Out of State Withholding. You will be required to complete a UPAY 830 form and the state specific withholding form for the state you claim tax residency.
- I am not a California resident and I am working outside of California. How do I avoid California withholding? Will the university withhold for the state I am working in?
- If you are working out of state, you may update out of state withholding by logging into UCPath >Income and Taxes > Out of State Withholding. You will be required to complete a UPAY 830 form and the state specific withholding form.
- I am not a California Resident and perform work both within California and out of California. What is the process for correctly reporting and withholding the split locations?
- If you are a Non-California resident, your earnings are subject to reporting and withholding in the state the wages are earned. You are required to submit an Out of State Income Tax Withholding form EACH time your change locations between California and your tax residency state. To do this: Log into UCPath online > Income and Taxes > Out of State Withholding (W-4). UC Path colleagues will review your submission and follow up with you directly to resolve any follow up questions.
- I am a non-California resident and I relocated outside of California but did not update my tax information for several months. What is the process for correcting the tax reporting?
- Submit an updated Out of State Withholding (W-4) form through UCPath online > Income and Taxes > Out of State Withholding (W-4). Once the process is complete, UCPath Center staff will correct the state gross and withholding records to be reflected in the state where the labor occurred.
- Will the UCPath Center refund the California tax withheld after I relocated?
- UCPath Center staff will process an adjustment to transfer your taxable wages and tax withholdings to the correct state and a refund will be processed if applicable. Refunds can only be processed for the current year.
- I am a US Citizen and I am working abroad. Is my university-pay subject to Federal or State income tax withholding?
- US citizens and resident aliens are federally taxed on their worldwide income and the university is required to withhold Social Security tax as well as federal income tax, in accord with your W4 on file. Please consult the IRS or a tax professional for specific guidance. This is a complex area of tax law.
Information for Employees - Non Residents working Out of Country
- I am not a US Citizen and I am working abroad. Is my university-pay subject to Federal or State income tax withholding?
- Nonresidents working outside of the US are not subject to reporting or withholding – Federal or State. Go to UCPath online > Income and Taxes > Out-of-State Income Tax Withholding. Follow the system prompts to complete the process. This will include completion of the Out of State Income Tax Withholding AND a Foreign Source Income Statement. UCPath Center staff will review your documentation and reach out directly with any questions.
- I am a nonresident for tax purposes (I have not passed the substantial presence test) who is going to relocate outside the United States while still a nonresident for tax purposes. The income I earn while located outside of the United States should not be reportable or subject to US Federal withholding. How is this accomplished?
- You will accomplish this update by utilizing the UCPath self-service portal. Go to UCPath online > Income and Taxes > Out-of-State Income Tax Withholding. Follow the system prompts to complete the process. This will include completion of the Out of State Income Tax Withholding AND a Foreign Source Income Statement. UCPath Center staff will review your documentation and reach out directly with any questions.
- I am not a US Citizen or Permanent Resident BUT I already passed the Substantial Presence test for the tax year. I have relocated outside the country while I continue to earn wages from UC Davis. Who reviews my situation and determines if I need to remain treated as a resident for tax purposes? What is the process to advise the employee and service channel of the circumstance?
- UCPath Center staff will evaluate your withholding and reporting once the following is completed:
- 1. Update Glacier and resubmit to the UC Davis Tax Reporting and Compliance office.
- 2. Complete the process at the UCPath self-service portal at UCPath online > Income and Taxes > Out-of-State Income Tax Withholding.
- 3. Open a case within the self-service UCPath portal asking UCPath Center staff to review your residency and reporting status for tax purposes.
Information for Employees - Non Residents working in Country
- I am a visiting international scholar with an available tax treaty. My earnings are subject to a tax treaty. I didn’t complete my tax treaty process prior to my paycheck being issued and taxes were withheld. Can you refund my taxes?
- No, the university cannot refund taxes withheld prior to the completion of your tax treaty paperwork. The tax treaty is only effective for payments after the completed treaty paperwork is submitted to the IRS by the university. You may be entitled to a refund when you file your tax return after the end of the calendar year.
- What is the timeframe to have my completed Glacier Packet with the tax treaty to impact my pay?
To be effective for a paycheck, Glacier packets must be accepted by the UC Davis Tax Reporting and Compliance team no later than 3 days before the Transaction Deadline Date (denoted with the “T” suffix) on the UC Davis Payroll Calendar. This is typically 13 workdays prior to the pay date.
Tax treaties are effective on the date accepted and signed by the UC Davis Tax Reporting and Compliance (TRC) and cannot be retroactively applied.
- I have a completed tax treaty. Why are you withholding California income taxes?
- California does not conform to federal law relating to income protected by US tax treaties. California income is taxable and subject to withholding.
- Why did Safe Harbor just start being deducted from my check? I have been receiving employee pay since January.
- Nonresident Aliens are not subject to FICA. It is likely that your residency status changed from a nonresident to a resident for tax purposes by passing the substantial presence test. All residents for tax purposes are subject to FICA or DCP, depending on their position.
- I have a tax treaty. Why is DCP safe harbor withheld?
- Tax Treaties apply only to income tax. Social Security tax is different and not covered by Tax Treaties. It is very common for a person to have wages exempt from income tax withholding due to a tax treaty and simultaneously be subject to Social Security/Safe Harbor withholding.
Scholarships or Fellowships
- I want to award a scholarship to an active student. How do I do this?
The appropriate process is to pay scholarships to active students is through Banner. Please work with Student Accounting. If a scholarship for an active student is submitted through KFS it will be returned to the department and delay the delivery of the funds.
- When does the University report fellowships for scholarships?
- The answer is dependent on the residency of the recipient.
United States citizens or resident aliens – The IRS does not require the university to report scholarship or fellowship grants for United States citizens or resident aliens; however, recipients of non-qualified scholarship and fellowship amounts should be advised that such amounts are taxable and that it may be advisable for the recipients to make estimated tax payments.
Under IRC Section 117, the determination of whether a scholarship or fellowship grant must be reported to the IRS by the recipient is based on whether the grant (or a portion of the grant) is qualified or non-qualified and whether the recipient is a degree or a non-degree candidate.
1. Degree Candidates
> Qualified Amounts: The portion of a qualified scholarship or fellowship grant used for tuition and fees and related course requirement expenses is excludable from the recipient’s gross income if the recipient is a candidate for a degree for the purpose of studying or conducting research at an educational institution.
> Nonqualified amounts: The portion of a scholarship or fellowship grant received for incidental expenses, e.g., room and board, travel, research, benefits, and expenses for equipment and other items not required for either enrollment or attendance in a course of instruction is not excludable from gross income. Therefore, such expenses are taxable.
> Tax Reporting: Although neither the qualified nor the nonqualified portion of such grants is subject to income tax reporting or withholding, any amount used for nonqualified expenses must be reported by the recipient on his or her U.S. and California Income tax return.
2. Non-Degree Candidates and Post-Doctoral Fellows
No amount of a scholarship or fellowship grant received by a non-degree candidate (including a post-doctoral fellow) is considered qualified; therefore, the entire amount of the grant is taxable and must be reported by the recipient on his or her tax return.
Nonresident Aliens: Under IRC Section 1441, the University as the withholding agent is required to report income and withhold Federal income tax from all income payments made to or on behalf of a nonresident alien, unless the payment is excluded under specific exemptions. The most common exemption is a tax treaty. All Nonresident aliens are required to complete Glacier registration which will advise if there is an applicable tax treaty exclusion.
Absent exclusions, non-wage payments made to a nonresident alien that has been determined to be taxable are subject to income tax withholding at a 30 percent rate. However, a special 14 percent rate applies to any taxable scholarship or fellowship grants paid to F or J visa holders.
Sales Tax & Use Tax
- Is the university exempt from California Sales tax?
No, the university is not exempt from California Sales Tax.
- Why does the campus have a different sales tax rate than surrounding cities?
The core campus is not within the Davis city limits and therefore isn’t subject to local district taxes. The same is true for locations that are in outlying unincorporated areas of the county such as Primate Center.
- What is the difference between sales and use tax? Which is the university subject to?
- California sales tax is imposed on retail sellers based on selling tangible personal property within California. Use Tax is imposed on purchasers for the use, storage or consumption of tangible personal property within California. Each piece of tangible property is only taxed once. Typically when the university purchases tangible personal property the retailer will collect sales tax. However, when the university purchases an item and the seller does not charge sales tax, or charges a lesser rate than applicable, the university is responsible for self assessing and paying the tax due as Use Tax.
- If a purchase is delivered on the core campus but the purchasing department is located within the City of Davis, which is the correct sales tax rate?
- Sales (use) tax is applied based upon the first taxable use of the goods purchased. If an item will be used at a location within the City of Davis but is delivered on core campus, the City of Davis sales tax rate is applied. If the vendor applies the wrong tax rate, the university is responsible for accruing the difference as use tax. There is a TR&C PowerPoint available for viewing.
- When does a vendor require a resale certificate?
- A sale of tangible personal property made in California for resale is not taxable. If UC Davis purchases an item for resale, a resale certificate should be issued to the vendor. All resale certificates are issued by Tax Services. When a department resells the item, it must then collect sales tax. If UC Davis makes a sale to a re-seller, a timely, valid resale certificate should be obtained from the purchaser. For guidelines on what information the resale certificate should include, when it is considered timely and how to verify the seller’s permit number on the certificate, see Publication 103 - Sales for Resale on the BOE website.
Vendor Payment Reporting & Withholding
- When is a 1099-MISC form issued?
The university is required to issue annual 1099-MISC to payees receiving $600 or more for services rendered or non-employee awards / compensation. Typically, 1099s are not issued to corporations or nonprofit entities. However, the IRS requires the university to report the following payments to corporations:
> Medical and health care payments
> Attorney fees and legal services
- Why does the university report independent contractor payments to the EDD?
- California State Senate Bill 542 became effective January 1, 2001 and requires the university to report twice a month the following information to the Employment Development Department (EDD) on independent contractors.
> First name, middle initial, and last name
> Taxpayer Identification Number
> Date payments
> Amount of payments
- When is the university required to withhold California State income taxes? Is there a mechanism to avoid California withholding?
- When the university pays a vendor who is not registered with the California Secretary of State for work performed within California, the university must withhold seven percent of all payments that exceed $1,500 in a calendar year.
If a vendor is not registered with the Secretary of State, they can apply to the franchise tax board for reduced withholding (form 589) or a waiver from withholding (form 590) before performing work for the university. If the FTB authorizes withholding other than seven percent, the applicable FTB form, 589 or 590, must be attached in KFS.
- How do I determine if the payee is registered with the California Secretary of State and not subject to the 7% withholding?
- The Franchise Tax Board (FTB) provides specific methods to determine if a company is registered:
> The university may rely on a completed FTB form 590, Withholding Exemption Certificate, stating the corporation has a permanent place of business in California.
> The university may rely on the businesses listed by the California Secretary of State. The company name listed on the Secretary of State website must match the invoice.
- The vendor just provided me the completed form 590/589 and we already paid them. Can we give them a refund of the withholding?
- No. The Franchise Tax Board (FTB) requires the university to withhold seven percent (of the gross California source payment) if the FTB approval for reduced withholding is not received before the nonresident is paid for their services.