General Tax FAQs
What is the University's Federal Tax ID (EIN)?
Is the University of Washington an IRC §501(c)(3) organization?
The University of Washington is considered a governmental tax exempt entity. It is exempt from federal income taxes under Internal Revenue Code (IRC) §115(1). The UW is not an IRC §501(c)(3) organization. Contributions to the University are deductible by donors under IRC §170.
Is the University subject to Washington State B&O Tax?
The State of Washington imposes B&O Tax on every "person" with substantial nexus to the State for the privilege of engaging in business activities under RCW 82.04.220. For purposes of the B&O Tax, the University of Washington is not defined as a "person" under RCW 82.04.030. Therefore, the University is not subject to Washington State B&O Tax.
My grant application asks whether the University is a state university described in §511(a)(2)(b) or a government entity under §170(c)(1). Which should I check?
The University should qualify under either provision.
I am trying to apply for a grant online. The foundation website asks me to provide the University’s tax ID but even though I do so, I can’t gain access to the online application. What should I do?
Many foundations use an IRS database that does not include all Universities. So when you enter the UW tax ID, the database does not recognize the entry. Generally, you can send an e-mail to the foundation explaining the situation and they will grant you access to the online application.
Where can I obtain a tax determination letter indicating the University’s §501(c)(3) status?
The University of Washington is exempt from federal income taxes under Internal Revenue Code (IRC) §115(1) not IRC §501(c)(3). Please click here to find the latest correspondence from the IRS which may be used as proof of our tax exempt status.
Who should sign the W-9 form?
The department sending in the W-9 should sign the form. The University completed W-9 uses the Student Fiscal Services address. If you are expecting to receive the check directly in your department, you should change the address to your address.
What is the best address to use when completing federal tax forms for the UW?
If you are expecting to receive a check directly in your department, you should use your department's address on the W-9 form. For all all other federal tax forms, the official address is 4333 Brooklyn Ave N, Seattle, WA 98195-9555.
I need help completing my tax return.
The University Tax Office does not provide individual income tax advice. Please refer to the Internal Revenue Service website for information about individual income taxes, or consult your tax professional.
Why must a foreign vendor submit a W-8BEN or W-8BEN-E to UW?
The UW, in accordance with U.S. tax law, must obtain a signed, completed W-8BEN (for individuals) or a W-8BEN-E (for entities) in order to process a payment to a foreign vendor. The form serves to verify foreign status. Also, it is used to claim an exemption from withholding under a US Tax Treaty. If the vendor chooses not to submit the form, the UW is required to withhold taxes at rate of 30 percent.
Sales/Use Tax FAQs
In general, what is subject to sales/use tax?
Tangible personal property and services relating to the tangible personal property are subject to sales/use tax.
How do I correct use tax?
You may contact Procurement Services at firstname.lastname@example.org to help reverse the use tax. Keep in mind that they will not reverse tax on transactions older than three months.
An out-of-state vendor charged me their state’s sales tax rate which is below the Seattle tax rate of 9.5%, do we also have to pay the Washington State use tax?
Yes. You could try contacting the vendor and letting them know that the item will be shipped to directly and used in WA and see if they would not charge their sales tax. Let them know you will be paying WA State use tax. You could also check https://f2.washington.edu/fm/tax/Departments/exemption-grid to see if there is a Sales Tax Exemption Certificate available for that state. If there is, you could provide this certificate to the out-of-state company so they do not charge their state’s sales tax.
What if the item I am purchasing will be shipped directly out-of-state and will not be received or used in WA, do we have to pay sales/use tax?
No. WA sales tax doesn’t apply when the seller delivers the goods to the purchaser who receives them outside of Washington
If we already paid sales tax, do we also need to pay use tax?
No, if tax applies and WA sales tax has been paid, you do not need to also pay use tax.
We buy some medical items that are exempt from sales/use tax when used on a patient, but we also buy these items for research. Are those items subject to sales/use tax if used in research?
That exemption does not apply to medical items used in research, therefore, most likely sales/use tax would apply. Contact the email@example.com if you have a specific example.
Are consulting services subject to sales/use tax?
No, personal services such as attorneys, consultants, doctors, dentists and engineers are not subject to sales/use tax.
I purchased a taxable item and also paid for the item to be shipped. The vendor separately itemized the item and listed shipping separate. They only charged sales tax on the item, do I have to pay use tax on the shipping charges?
Yes. A shipping/Delivery charge charged in conjunction with a taxable item, is considered part of the sales price and is subject to tax. (If the shipping service was sold separately by itself, such as if you had gone to the UPS to have it shipped, the shipping fee would not be subject to tax).
If a vendor charged Value Added Tax (VAT) do we have to pay it?
Yes, if the vendor charged it, we are responsible for paying it.
We will be purchasing several items with a total cost of more than $1000 that will be used in research and development, could the purchase qualify for a sales tax exemption?
Yes, it could potentially qualify for the Machinery and Equipment exemption. Contact the Equipment Inventory Office at firstname.lastname@example.org if you have questions on this.
What is FICA?
FICA is the abbreviation for the Federal Insurance Contributions Act, which requires employers to directly pay OASDI and Medicare taxes and to withhold and pay an equal amount on behalf of their employees.
FICA requires employers to pay a 6.2% tax for Old-Age, Survivors and Disability Insurance (commonly known as "social security tax"), and to withhold and pay to the federal government an equal 6.2% on behalf of employees. The amount of contributions made by an individual during his/her career is used in determining the individual's social security benefits upon eligibility. For 2016, the first $118,500 of a person's wages is subject to the social security tax.
Medicare taxes are, like social security taxes, matched by your employer. These taxes are the means by which the government funds Medicare. The Medicare tax rate is 1.45% withheld from your paycheck and an equal amount paid by the UW. There is no limitation upon the amount of wages subject to Medicare taxes.
Individuals earning over a threshold based upon their filing status are subject to additional 0.9% Medicare tax. For 2016, those thresholds are:
|Married filing jointly||$250,000|
|Married filing separate||$125,000|
|Head of household (with qualifying person)||$200,000|
|Qualifying widow(er) with dependent child||$200,000|
Employers are required to withhold this additional 0.9% tax where wages exceed $200,000 during a calendar year, regardless of filing status.
If I paid in the maximum amount of OASDI/Social Security taxes for the year while working for another employer, are my earnings from UW subject to additional OASDI/Social Security withholding?
Yes, each employer must withhold and pay social security taxes on the wages paid yearly to each employee up to the maximum amount. However, there would be no additional withholding if the student FICA exemption rules are met. Note that there is no maximum for the withholding of Medicare taxes.
If I worked more than one job during the year and exceeded the OASDI/Social Security withholding limit based on my combined income, how do I claim a refund?
You may be eligible to obtain a refund of excess withholding by claiming a refund on your Form 1040 for the year when you file your personal income tax return.
What if I worked more than one job during the year and my combined income exceeded the additional Medicare tax threshold, but did not exceed the threshhold for employer withholding?
UW is not permitted to withhold specifically for additional Medicare tax. However, an employee may request additional withholding on the employee's W-4, or may wish to make quarterly estimated tax payments in order to satisfy any potential tax liability.
What if I earn over $200,000, but will not exceed the additional Medicare tax threshold because I file a joint return with my spouse and our income will not exceed $250,000?
UW is required to withhold additional Medicare taxes on wages over $200,000, and may not stop withholding even if requested by an employee. The employee may be able to claim a credit for any withheld additional Medicare tax on the employee's individual tax return.