Tax Treaties
Under the Internal Revenue Service, the US government maintains several international tax treaties based on country of foreign residence, not the country of citizenship or birth. They also vary in their terms and scope. Most tax treaties involve exempt dollar limits, which is the amount of earnings that can be exempt from income tax withholding. Any wages earned over the exempt dollar limit will have income tax withheld.
Different treaties may also involve an exempt time limit, which is the number of years a foreign employee can use the income tax treaty. This time limit begins at the date of arrival in the United States, not the first year the tax treaty exemption is claimed.
Treaties are only applicable to Non-Resident Aliens for tax purposes. To claim a tax treaty exemption, you must submit IRS Form 8233 to your employer prior to starting your employment and at the beginning of each new tax year. For payments from the University of Rochester: If are eligible and choose to claim a treaty benefit, Sprintax Calculus will generate this form for you. Alternatively, you may refer to IRS instructions in order to fill out your Form 8233.
For more information on tax treaties, read IRS Publication 901 (PDF). For frequently asked questions, please see below.
- How do I know if I am eligible for a treaty?
In general, in order to be eligible for a tax treaty in the US, a person must meet the following criteria: 1) be a resident of a country that has a tax treaty with the US, 2) be a Non-Resident Alien for Tax Purposes in the United States, 3) currently be earning qualifying income in the United States, and 4) have a US Social Security Number.
For international students at the University of Rochester, Sprintax Calculus will determine your eligibility for a tax treaty. If the information you put into Sprintax Calculus indicates that you are eligible for a tax treaty, Sprintax Calculus will prompt you to accept that tax treaty. If you previously completed Sprintax Calculus and were not informed of your eligibility for a tax treaty, it likely means you are not eligible for one.
- How do I claim a treaty that I am eligible for?
If you are eligible for a tax treaty and accept that treaty in Sprintax Calculus, Sprintax Calculus will generate the appropriate tax treaty documents for you along with your Tax Summary Report. You must print, sign, and submit these forms to the university Payroll office in order to actually claim the treaty and for the benefits of the treaty to take effect.
Please note that any forms generated by your University of Rochester Sprintax Calculus record and turned into the University of Rochester Payroll Office only apply to payments received from University of Rochester. If you are authorized for off-campus employment and receive payments from that employer, you would need to complete separate tax withholding forms and tax treaty documents for that employer.
- Sprintax Calculus told me I was eligible for a treaty but I did not accept it.
It is not mandatory to claim a tax treaty you are eligible for, so if you previously did not accept a tax treaty in Sprintax Calculus then that is not an immigration issue. It just means that your payments will be taxed as they would be if you were not eligible for a tax treaty at all.
If you decide you do want to claim a tax treaty you are eligible for, you can return to your Sprintax Calculus record and click through the screens to the page that asks you about the tax treaty to change your answer.
- What does it mean to renew a tax treaty?
After the first time you submit your completed tax treaty documents, those documents will eventually need to be renewed. Some renewals are yearly, some are every 3 years. You will receive notification via email if you are required to complete renewal paperwork.
If you have any further questions about tax treaties, please email fnpayroll@ur.rochester.edu