To: Deans, Directors and Budget Unit Heads
From: Theresa Cook, Director of Accounts Payable
Subject: Payment Request for Services (Independent Contractor Payments)
This memo addresses the process and responsibilities for payments to independent contractors for services less then $1,000.00. All payments for services in excess of $1,000.00 must be processed through a purchase order in accordance with the University Procurement Policy. It is important to recognize when processing purchase orders that sufficient time be allowed for bidding/processing. Please note, requests for payments in excess of $1,000.00 without a purchase order will be returned by Accounts Payable to the requesting department.
An Independent Contractor is defined as a non-university employee who possesses the appropriate skill and expertise to fulfill a department's need that cannot be provided by regular employees. This individual must meet the IRS tests for Independent Contractors. There are two to four forms required to be completed to create a payment:
- The Independent Contractor Determination and Certification Form available at http://webserv.adminsvc.temple.edu/employeeforms/AccountsPayable.htm will assist you in making the Independent Contractor determination. This form complies with IRS rules and regulations and provides the appropriate supporting documentation for after the fact audits. It requests information on citizenship including information regarding non-resident alien taxation requirements. This form must be completed in its entirety and signed by both the contractor and the University employee with appropriate signature authorization. It is to be attached to the Contract Agreement Request for Payment form.
- Once it has been determined that an individual is a consultant / independent contractor, a Contractual Agreement Request for Payment Form must be completed. This short legal contract form developed by Legal Council serves as the check request and is also available at the same forms web site. The form needs to be signed by the contractor and the University employee with appropriate signature authorization.
- The W-9 Request for Taxpayer Identification Number form will also be needed to be completed and signed by the contractor if it is the first time they are being paid. This form is also available at the same forms web site. This form is not required if the contractor has submitted one previously.
- IRS form 8233 Exemption from Withholding is required to be completed and submitted if the independent contractor is a non-resident alien requesting tax treaty exemption. This form is available at the same web site. Please note that in the case of non-resident aliens, backup withholding of 30% of the payment will be deducted and submitted to the IRS unless a properly filled out Form 8233 is submitted to claim an exemption under a tax treaty.
You will need to submit the Independent Contractor Determination and Certification form, the independent contractor's invoice, the W-9 (if this is the initial payment), and the 8233 (if appropriate) to the Contractual Agreement Request for Payment when submitting to Accounts Payable for payment.
If you have any questions, please call Lydia Vasquez 1-5279 or me at 1-5722
Information for the University procurement policy is available through the Purchasing Department website: http://www.temple.edu/purchasing/