How do I know if the U.S. has an income tax treaty with my country?
You can refer to IRS publication 901 U.S. Tax Treaties for more information.
How does a tax treaty help me on my income tax return?
Tax treaties generally allow you to exclude a specified amount of U.S.-source income on their U.S. tax return. This in turn reduces the tax liability because you do not have to pay taxes on that amount.
I am a student from the People’s Republic of China currently studying in the U.S. How does the income tax treaty between the U.S. and China apply, especially for students with scholarships and fellowships?
If you are Chinese and in the U.S. solely for the purpose of your education, you may be able to exclude up to $5,000 of income that you receive from work performed in the U.S. Under the U.S.-China treaty, taxable scholarships and fellowships are also excluded from income. For additional information, please refer to IRS Publication 901 U.S. Tax Treaties.
If my total wages do not exceed the amount which is exempt because of a tax treaty, do I still need to fill out IRS Form 8233?
Yes, Form 8233 allows employers to avoid withholding federal income tax on the students’ and scholars’ earnings until the applicable treaty benefit amount is exceeded. International students and scholars who qualify should complete Form 8233 annually and give it to their employer..
What does the term “unlimited” mean in the amount column of the charts in IRS Publication 901, U.S. Tax Treaties?
“Unlimited” means that there is no maximum limit on the dollar amount that the individual can exclude. For additional information, see IRS Publication 901 U.S. Tax Treaties.