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I 8233 VUNGL
I 8233 VUNGL
In general, section 1441 requires 30% • For each tax year (be sure to specify treated as a resident alien for certain
the tax year in the space provided above purposes (for example, filing a joint
income tax withholding on compensation
Part I of the form), income tax return), such individual is still
for independent personal services
(defined later). Sections 1441, 3401, and • For each withholding agent, and treated as a nonresident alien for
3402 require withholding, sometimes at • For each type of income. withholding tax purposes.
30% and sometimes at graduated rates, However, you can use one Form 8233
on compensation for dependent personal For more information on
to claim a tax treaty withholding exemption TIP determining resident alien or
services (defined later). However, some for both compensation for personal
payments may be exempt from nonresident alien status under the
services (including compensatory “substantial presence test” as a result of
withholding because of a tax treaty. scholarship or fellowship income) and
Complete and give Form 8233 to your having applied the COVID-19 Medical
noncompensatory scholarship or Condition Travel Exception to exclude
a resident of that country (1) under the specified period. Notice 1392 for more information about
country’s domestic law, and (2) under the completing Form W-4.
terms of the residency article of the tax Public entertainers. Generally, athletes
treaty between the United States and that and entertainers are not exempt from tax Box 1c. Check the single box
country. on income derived from their activities. regardless of your actual marital status.
Most treaties have a special article that
A nonresident alien can claim a tax Step 2. Use Step 2 of Form W-4 if you
covers them that takes precedence over
treaty benefit on this form only if that have more than one job at the same time.
the independent personal services and
individual is the beneficial owner of the
dependent personal services articles of Step 3. Complete Step 3 only if you
income and meets the residency
treaties. They may be exempt in some are a nonresident alien who is a resident
requirement and all other requirements for
treaties only if the total amount paid for a of Canada, Mexico, or South Korea, or a
the requested benefits under the terms of
year is below a dollar threshold. Generally, resident of India who is a student or
the tax treaty.
the IRS cannot accept Form 8233 business apprentice. You cannot take a
If you are claiming a benefit under because the exemption may be based on deduction for a qualifying child or other
either the income from employment/ factors that cannot be determined until dependent unless you meet the above
dependent personal services article or the after the end of the year. These individuals requirements. See Pub. 519 for more
income from independent services/ are subject to 30% withholding from gross information.
business profits article of the treaty, you income paid for personal services
must be a resident of the treaty country. performed unless they apply for a reduced Step 4. Complete Step 4 if you have
However, if you are claiming a benefit rate of withholding using Form 13930. other income on which no tax was
under the student/trainee or teacher/ withheld. Generally, nonresident aliens
researcher article of a treaty, you generally Required Withholding Form cannot take the standard deduction. Also,
only need to have been a resident of the any itemized deductions to which you are
treaty country immediately before (or at For compensation you receive for entitled may be limited. See Pub. 519 for
the time) you came to the United States. independent personal services, complete more information.
Form 8233 to claim a tax treaty
Compensation for Independent withholding exemption for part or all of that The above instructions generally
! apply to the 2021 Form W-4. See
Personal Services income.
CAUTION the subsequent year Form W-4
Independent personal services are Compensation for Dependent and its instructions for withholding that
services performed as an independent occurs after 2021.
Personal Services
contractor in the United States by a
nonresident alien who is self-employed Dependent personal services are services
performed as an employee in the United
Compensatory Scholarship or
rather than an employee. Compensation
for such services includes payments for States by a nonresident alien. Dependent Fellowship Income
contract labor; payments for professional personal services include compensatory In general, scholarship or fellowship
services, such as fees to an attorney, scholarship or fellowship income (defined income is compensatory to the extent it
physician, or accountant, if the payments later). Compensation for such services represents payment for past, present, or
are made directly to the person performing includes wages, salaries, fees, bonuses, future services (for example, teaching or
the services; consulting fees; and commissions, and similar designations for research) performed by a nonresident
honoraria paid to visiting professors, amounts paid to an employee. alien as an employee and the
teachers, researchers, scientists, and performance of those services is a
prominent speakers. Required Withholding Form(s) condition for receiving the scholarship or
fellowship (or tuition reduction).
Business profits. Certain treaties do not Complete Form 8233 for compensation
have an independent personal services you receive for dependent personal Example. XYZ University awards a
article. Payments for independent services only if you are claiming a tax scholarship to George, a nonresident alien
personal services may be covered under treaty withholding exemption for part or all student. The only condition of the
the business profits article of an applicable of that income. scholarship is that George attends classes
income tax treaty. If you are eligible to and maintains a minimum level of
Required Withholding Form Avoid Common Errors CAUTION benefits or change your