The University of Iowa Payroll Office is a department of Human Resources within the Finance and Operations area. The University of Iowa Payroll Office is dedicated to providing reliable, comprehensive payroll-related services. These services include:
- paying employees accurately and timely for both the biweekly and monthly payrolls
- providing annual tax information for US Citizens and nonresident aliens
- employment verifications
- maintaining vacation and sick leave balances
- payroll-related accounting data
- handling federal and state withholding tax deposits and reporting
- auditing of independent contractor payments
The Payroll Office does not give individual income tax advice on personal income tax issues. Please consult a tax advisor for information on those types of inquiries.
For more information, consult the University of Iowa Payroll Web Site.
Nonresident Alien Taxation
U.S. taxation can be very complicated for nonresident aliens (tax terminology). Please refer to Payroll for tax information. Although the University of Iowa may not provide tax advice, Payroll can help guide you in the right direction.
- Students: The Office of International Students and Scholars has a software program that can help you in completing a nonresident alien tax return. Watch their website for times and dates.
- Staff: Contact Payroll at email@example.com.
The University of Iowa offers many pre-tax benefits as well as opportunities to reduce your taxable income. Paying for your benefits on a pre-tax basis saves you money because your contributions are subtracted from your salary before federal and state income taxes are calculated and with the exception of your retirement plan contributions, before Social Security and Medicare taxes are deducted.
Your contributions for the following benefits are automatically set up to be paid on a Pre-Tax Basis:
- Health Insurance coverage
- Dental Insurance coverage
- Group Life Insurance
- Supplemental Life Insurance
- Accidental Death and Dismemberment coverage
- Retirement Plan contributions
Opportunities to Reduce your Taxable Income
Health Care Spending Accounts and Dependent Care Spending Accounts are a great way to save on your taxes, and in effect, pay for eligible medical expenses or dependent day care expenses on a pre-tax basis. Pre-tax contributions from your taxable income are deposited into your accounts to allow you to be reimbursed for qualified expenses. You make an annual designation for your contributions.
Faculty and staff members participate in either the University Funded Retirement Plan through TIAA-CREF (Teachers Insurance and Annuity Association/College Retirement Equities Fund) or the Iowa Public Employees Retirement System (IPERS). Under both plans, federal and state income taxes on both the University and the staff member contributions are deferred until the benefits are received. Through the University’s Voluntary Retirement Savings Program, additional retirement savings contributions may also be made on a pre-tax basis by submitting a VRSP-Salary Reduction Agreement form. A Roth 403(b) option is also available.
Student FICA Exemption
Students that are employed by the University may be entitled to an exemption to FICA withholding. Please see additional information at Payroll.
Spousal Travel Benefit
Spousal travel ordinarily occurs at the expense of the employee. However, in two limited circumstances, spousal travel may be reimbursable. The first involves the situation where the predominant purpose of the spouse’s travel is to serve the University’s business purpose in a substantial and material manner. The second is where the spousal presence is desirable from an institutional perspective. The tax consequences related to these two limited circumstances are set forth below.
- Reimbursement without taxing employee
In order for spouse travel to be reimbursed by the University, without any income tax consequences to the employee, it must meet a high IRS review standard. That standard requires that the presence of the spouse accomplishes a bona fide business purpose, i.e. that the presence of the spouse is essential (not just beneficial) to the employee being able to carry out his/her business purpose for the University.
To meet the IRS test, the spouse must perform substantive business related functions, and those functions must be documented. Documentation such as an invitation naming the spouse, an agenda which details the role of the spouse at the business meeting and the like shall be retained and submitted with the reimbursement request. Spousal travel for strictly fundraising purposes must meet University of Iowa Foundation travel reimbursement requirements and be paid for in University of Iowa Foundation funds.
Not Meeting Test
The performance of incidental services such as typing notes or attending social events does not rise to the level of a bona fide business purpose.
- Reimbursement to employee
Where prior institutional permission has been obtained based upon it being
desirable that the spouse accompanies the employee, but the higher standard is
not met, then reimbursement for the spouse’s reasonable expenses, in accord
with existing University travel policy, will result in that amount being added to
the employee’s form W-2 as additional compensation.
- Unreimbursed spousal travel
Spousal travel not meeting the above provisions (Paragraphs A and B) will be at
the employee’s expense.