Royalty Payment Processing
In this document, the L&S business office provides information for the benefit of L&S departments, programs, faculty and staff concerning payment processing for payment of intellectual property(such as royaties). L&S follows UW-Madison policy and procedure, which adopts the IRS policy definition of a "royalty" as something paid to obtain iintellectual property, or to use intellectual property or rights to such property.
The IRS classifies the following expenditure terms similarly:
Royalty Patents Licensing Copyrights Rights
Tradenames Trademarks Inellectual Permissions
For US citizen and permanent resident payments use the Direct Payment(DP) form with account code 3860 and a completed, signed W-9 current version form.
For Nonresident Aliens (NRA) payments use the Payment to Individual Report(PIR) form with account code 3860 and the pertinent supporting tax documents.
Please use the following link on the UW Accounting Services web site and scroll down to Royalties Payments (Tax Withholding and Reporting)