Tax treaty information
Tax treaty information
- Additional Statement for Japan (pdf)
- Tax treaty statements
- Tax treaty fill-in forms
- Tax treaty articles - Independent Personal Services (pdf)
Tax treaty exemption
Nonresident aliens from countries with which the United States (U.S.) has a tax treaty agreement can exclude some or all of their income from Federal Income Tax withholding under the terms of the tax treaty between their country of residence and the U.S. These tax treaties may provide to nonresident aliens exemptions from federal income tax payable on wages, scholarships/fellowship grants, and independent personal services. Student exemptions from withholding of income tax for personal services exist for several countries but are limited to specific dollar amounts per calendar year. Most treaties specify a limited number of years that an individual is eligible for the exemption.
Nonresident aliens who are eligible for an income tax exemption must complete the Internal Revenue Service (IRS) Form 8233 (Exemption From Withholding on Compensation for Independent Personal Services of a Nonresident Aliens). Nonresident alien students, teachers, and researchers claiming exemption are required to provide an additional tax treaty statement. See more information on the tax treaty statement.
The IRS Publication 901- U.S. Tax Treaties (pdf) can be used for a quick reference guide for treaty information. However, it is not a complete guide to all provisions of every income tax treaty.
The forms which must be filed to claim tax treaty exemption for students, teachers and researchers are summarized below.
The Form 8233 (pdf) should be used by nonresident alien students, teachers, and researchers to claim exemption from withholding on compensation for services that is exempt from taxation under a U.S. tax treaty. View IRS instructions for completing the form (pdf).
The Form 8233 must be filed by all nonresident aliens who claim a withholding exemption on compensation based on a tax treaty between the U.S. and the individual's home country. The individual must file the Form 8233 whether the exemption is claimed for services as an employee or services as an independent contractor.
It is important that the Form 8233 be completed in its entirety. The Washington office that processes the Forms 8233 will reject a form for any one of the following reasons:
- Missing United States Visa number,
- Missing name of country issuing passport and passport number,
- Missing description of compensation and manner of compensation (i.e., lump sum, monthly payments, etc.),
- Missing signatures,
- Missing permanent address,
- Missing Tax Treaty Provision under which the individual is claiming exemption from withholding, and the individual's country of residence, or
- Use of older versions of the Form 8233; (the most current version of the Form 8233 is dated October 1996.)