An individual must fill out a Form W-8BEN and have a U.S. Taxpayer Identification Number (TIN) in order to claim a tax treaty benefit.
A foreign individual may be eligible to claim exemption from or a reduced rate for withholding on certain types of income:
- Employee Compensation, Honoraria, or Independent Contractor Payments
- Scholarship, Fellowship, Grant, or Royalty Payments
A foreign individual must meet eligibility requirements based on IRS regulations and University administrative procedures to claim exemption from withholding using a tax treaty. Not all income types are exempt under treaty benefits and many have limits on the amount of time that an individual can claim the exemption. To view all countries that currently have a tax treaty with the U.S., click here. You may also access IRS Publication 901 for country specific details.
To claim exemption from withholding on Employee Compensation, Honoraria, or Independent Contractor Payments:
- Complete Part I, II, and III of IRS Form 8233 Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a non-resident alien.
- Non-resident alien students, professors, teachers, and researchers must attach to Form 8233 the statement required by Rev. Proc. 87-8, 87-9 or 93-22.
- Submit IRS Form 8233, the completed FNIF, and copies of the individual's immigration documents (visa page from passport, I-94, I-20 OR DS2019) to the International Tax Specialist before a payment is requested. Note that exemption will not be made in arrears; no refunds of withholding prior to tax treaty election will be made.
- The International Tax Specialist will review the immigration documents, payment type, and specific treaty language in order to determine eligibility for the treaty exemption.
- If an individual is considered eligible, the International Tax Specialist will complete Part IV of IRS Form 8233 and apply for the exemption with the IRS.
- IRS Form 8233 is only valid for ONE calendar year. In order to renew an exemption, the individual must forward a new IRS Form 8233 to the International Tax Specialist, a new FNIF form, copies of current immigration documents and the country specific statement in December of the current tax year for the following tax year.
To claim exemption from withholding on Scholarship, Fellowship, Grant, or Royalty Payments:
- Complete IRS Form W-8 BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding.
- Submit Form W-8 BEN, a completed KSU Foreign National Information Form (FNIF), and copies of the individual's immigration documents to the International Tax Specialist before payment is made.
- The International Tax Specialist will review the individual's visa history, payment type, and specific treaty language to determine eligibility for the exemption.
IRS Form W-8BEN is valid for THREE (3) calendar years as long as the individual's immigration status remains unchanged.
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