Nonresident alien set up in payroll

[mackcitychips]

I have a Non-Resident Alien working for me this summer. He is on a J1 Work Visa. I do not see how to set him up in Square Payroll as a Non-Resident Alien. He has a SSN. I want to make sure the correct Withholding taxes get taken out of his paychecks. Thanks 

[kellyj]

@mackcitychips

I reached out to our Payroll Support team for some clarification around this. Visa holders are generally exempt from paying Medicare, Social Security or federal unemployment taxes - and we don't currently have the ability to exempt employees from these types of taxes.

The IRS has a good resource for navigating these specifics as well. https://www.irs.gov/individuals/international-taxpayers/foreign-student-liability-for-social-securit...

[mackcitychips]

Thank you for your reply, I appreciate your help.  It would be nice if there was a feature to be able to override the automatic tax calculations. I appreciate your help. Thanks, Tina 

[kellyj]

@mackcitychips 

I'll pass that feedback to the team for sure!

[Steph_Pastries]

Has there been any update to this? How can I override the taxes deducted for J-1 visa holders?

[FSquirrel]

WOW. I just talked to payroll customer service. Although they were responsive and nice enough, I am appalled to find out that there is no work around for this issue. It is unbelievable to me that Square would release the payroll service in the first place without thinking of every necessary tax situation. There must be so many. Why on earth can't there be a pop that says "if you change this, it is your responsibility as the business owner if the taxes are incorrect" and then allow manual changes to the taxes? Or why have they not added as special check box for Nonresident Alien tax situations? I sure hope this is not a race issue because I would hate to have to change to a new system. I have been very happy with Square overall, but this is a real shocker and incredible inconvenience as a small business owner to have to figure out how to pay my employee AND report it separately to the IRS even though she is exempt. I will also have to still include her tips without hours as it's imported so the tips come out right, write her a check for that, then figure her pay separately. Then all of my end of the year reporting will be off as well. I will only have one employee like this per year for a couple months max, it's not worth switching to a new system. What a mess! Please prioritize this fix!!

[CreedePizza]

Does anyone know if this has been updated for 2023? If not, does anyone know of a free or inexpensive workaround that doesn't involve another payroll service? Thank you! 

[MayaP]

Hey @CreedePizza I am sorry but there has not been any further update on this. 

We are making some changes to our feature request process, I would submit this on our Ideate Board. Our Product Team will be able to view and track requests from there. If there are any updates we will make sure to let you know there. In the meantime, I would reach out to Square Payroll Team to see if they have any workarounds, you can reach them at 1-855-700-6000 squ.re/contactsqsupport. 

Thank you again for your input! 

[sreardon]

Another example of Square not keeping up with customer requests for years.  I'll be switching at the end of my summer season to a different company.  

[CDLMLBI]

It is really difficult to understand how Square offering a well set up Payroll system hasn’t found a way to support the hiring of Non Resident Alien on a J1 Visa. As stated above, they are not subject to paying social security, unemployment and Medicare taxes but are subject to Federal and State taxes. Upon inquiring with Square Payroll we were recommended to add them to the payroll system as contractors instead of employees as there is currently no way to remove some non applicable taxes, but this is not appropriately legal. They should be on a W2 with Square filling a 1040NR on our/their behalf (and not a 1099 as contractors). Please Square Payroll expend your services by covering this essential requirement. As a seasonal business we heavily rely on the hiring of J1 Visa students who are available beyond the regular summer season and allow us to extend our operation into the shoulder seasons. It is also somehow quite embarrassing to deny them employment with so many of them inquiring, due to the restriction we are facing whilst using Square Payroll. 

[_Violet · Accepted solution]

Hi @CDLMLBI - Thanks for reaching out to us here on the Square Seller Community to bring this to our attention. I reached out to the Payroll Advanced Support Team to confirm some information to provide you.

At this time, Square Payroll does not have the ability to exempt employees from specific federal taxes such as Social Security and Medicare and therefore we do not support payroll processing for workers on some work visas, including J-1. We cannot guarantee taxes that are withheld when processing payroll will be refunded to those employees at a later date.

The Payroll team is constantly working to improve the product based on ideas and feedback like this, so I’ll be sure to share your thoughts with the team. If you choose to close your Square Payroll account due to this product limitation, you can do so from your Payroll Settings in Dashboard.

I hope this information is helpful but please do let me know if you have any additional questions.

[KruseJ]

Does anyone have J-1 visa employees on their payroll? These employees are exempt from Medicare, Social Security and all state and local taxes. I am having trouble running their payroll because I am not finding a way to mark them exempt from social security and medicare and they are being taxed on these items. Does anyone know how to fix this?

[ruffin]

ssssssssss

[RobynR]

Hey @KruseJ,

Thanks for joining us in the Community.

I went ahead and merged your post to an existing thread where other Square Sellers have discussed this topic as well. We merge duplicate conversations together to keep like comments in one place, and to make it easier for others to find the thread in the future. 

Take a moment to review the best answer above. Your vote for this feature request in our Ideate Room is highly valued. Our Product Team actively monitors this forum, and they use feedback like yours to continuously enhance our products.