Tax Treaty Benefits

This policy applies to all foreign Non-resident Alien University employees.

Eligibility

1. In order for foreign Non-resident Alien students and scholars to be exempt from federal and state income tax withholding the Non-resident Alien must meet following certain criteria. 
   1. There must be a treaty provision that exists between the United States and the Non-resident alien’s country of residence. 
   2. The individual must meet the treaty eligibility requirements for the particular treaty article being claimed. 
   3. The individual cannot have met the Substantial Presence Test (SPT) or cannot meet the Substantial Presence Test (SPT) within the current tax year.
   4. The individual must have either a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN) to be able to receive treaty benefits. 
   5. The correct tax treaty exemption forms must be completed and supported by all required documentation.

To ensure compliance with US tax withholding laws.

The type of form used to claim treaty benefits depends upon the type of income being paid under the treaty provision.

1. For personal services income
   1. Use Form 8233 and the Tax Treaty Statement if the individual is a student or a teacher/researcher. Form 8233 and the Tax Treaty Statement expires at the end of each calendar year. The UNL Payroll Office will notify the Non-resident Alien that he/she must complete a new form each year. The Non-resident Alien is responsible for completing the forms and returning the completed forms to the Payroll Office prior to the deadline indicated in the letter. If the Non-resident fails to complete the proper forms each year, he/she will not be given treaty benefits until such time that the new treaty forms are completed.
   2. Use form W-8BEN for scholarship/fellowship grants and royalty income if the foreign individual is a non-resident alien for tax purposes. This form is valid as long as the individual is eligible for treaty benefits and the individual receives a tax reportable payment at least once per year.

Human Resources, Employee Relations - Questions

402-471-3101, hroffice@unl.edu