Withholding Certificates and Exemptions for Personal Services and Students
Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, is used by a nonresident alien individual to claim a tax treaty exemption from withholding on some or all compensation paid for:
- Independent personal services (self-employment),
- Dependent personal services (wages), or
- Personal services income and noncompensatory scholarship or fellowship income from the same withholding agent.
NOTE: Persons providing independent personal services can use Form 8233 to claim the personal exemption amount.
Form W-4 Employee's Withholding Allowance Certificate
Form W-4 is used by a person providing dependent personal services to claim the personal exemption amount, but not a tax treaty exemption. Nonresident alien individuals are subject to special instructions for completing the Form W-4. Refer to Chapter 9 of Publication 15, Circular E, Employer's Tax Guide.
Resident Alien Claiming a Tax Treaty Exemption
Generally, only a nonresident alien individual may use the terms of a tax treaty to reduce or eliminate U.S. tax on specified income. A nonresident alien who has become a resident alien for U.S. tax purposes may be able to claim benefits under a tax treaty that apply to reduce or eliminate U.S. tax on specified income. Most treaties contain a provision known as a "saving clause." Exceptions specified in the saving clause may permit an exemption from tax to continue for specified income even after the recipient has otherwise become a U.S. resident alien for tax purposes.
Many tax treaties contain exceptions to the saving clause with respect to students, trainees, teachers, and researchers with respect to wages, scholarships and research grants. Exceptions specified in the saving clause may permit an exemption from tax to continue even after the recipient has become a U.S. resident alien. In this situation, the individual must give you a Form W-9 and an attachment that includes all the following information.
- The individual's name.
- The individual's U.S. taxpayer identification number.
- A statement that the individual is a resident alien under:
- The green card test,
- The substantial presence test, or
- The residency article of a tax treaty.
- The tax treaty under which the individual is claiming a benefit.
- The article number of the tax treaty under which the individual is claiming a benefit, and a description of the article.
- A statement that the individual is relying upon an exception to the saving clause of the tax treaty to claim the benefit.