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I. |
The United States
has income tax treaties with a number of foreign countries. Under these
treaties, residents of foreign countries are taxed at a reduced rate, or
are exempt from U.S. income taxes on certain items of money they receive
from sources within the United States. These reduced rates and
exemptions vary among countries and specific items of income. |
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A. |
The Internal Revenue
Service (IRS) Publication 901 covers the tax treaty rules in effect at
this time. Copies of Publication 901 can be obtained from: |
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1. |
The IRS by calling the toll free number 1-800-829-3676 |
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2. |
The IRS web page information
http://www.irs.gov/pub/irs-pdf/p901.pdf |
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B. |
The
UWM International Tax Packet includes a listing of title codes used
by the university and their matching income codes. An individual matches
the name of their country, and the income code that matches with their
title code, to see if they may be eligible for treaty benefits. |
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C. |
In order to
determine if a foreign national is eligible for treaty benefits and to
determine whether that foreign national should be taxed as a
nonresident alien or a resident alien, a
Nonresident/Resident Alien Tax Information Request (UW 1123) should
be completed. |
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II. |
Wage Income
(Teaching and Research titles and Studying and Training titles) and
non-wage income (Research Assistants). |
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A. |
The
Nonresident Alien Exemption Form (IRS Form 8233) "Exemption From
Withholding on Compensation for Independent Personal Services of a
Nonresident Alien Individual" should be filed annually in the Payroll
Office by nonresidents claiming exemption from withholding on wage
income or research assistant income due to a tax treaty. |
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B. |
Each 8233 must have
an attachment of the appropriate revenue procedure. See the
International Tax Packet for copies of the appropriate revenue
procedure. |
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1. |
8233 with
Nonresident Alien Revenue Statement 87-8 - Students
is for
students. |
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2. |
8233 with
Nonresident Alien Revenue Statement 87-9 - Non-Students
is for
professors, teachers and researchers and scientists. |
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III. |
Fellowships/Scholarships should be handled in the following
manner: The IRS Form
Nonresident Alien Fellowship Treaty Form (W-8BEN) Certificate of
Foreign Status of Beneficial Owner for Untied States Tax Withholding
should be filed by nonresidents receiving Fellowship/ Scholarship
non-wage income covered by a tax treaty which exempts that income from
taxation. |
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IV. |
Nonresident aliens,
who are not from a treaty country or whose tax treaty does not exempt
their income, must have taxes withheld. (See
Policy 7.3.1) |
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V. |
A resident alien who
has treaty benefits must file a
Nonresident Alien to Resident Alien Treaty Form (Form W-9) with
Treaty Based Position Disclosure. |
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The University does not provide individual income tax advice. If
employees need more assistance, they can call the IRS at 1-800-829-1040
or consult a private tax advisor. |
