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.

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:

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.

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.

Wage Income (Teaching and Research titles and Studying and Training titles) and non-wage income  (Research Assistants).

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.

Each 8233 must have an attachment of the appropriate revenue procedure.  See the International Tax Packet for copies of the appropriate revenue procedure.

8233 with Nonresident Alien Revenue Statement 87-8 - Students is for students. 

8233 with Nonresident Alien Revenue Statement 87-9 - Non-Students is for professors, teachers and researchers and scientists.

 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. 

 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) 

 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.