Non-resident aliens performing services in the United States are subject to 30% withholding for federal taxes unless:
- the payee has a U.S. Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN),
- the payee is from a country that has a tax treaty with the United States, and
- the payee has not exceeded the maximum days in the U.S.
As the maximum days in the U.S. usually is 183 or less, ISU students usually cannot be exempted from withholding.
If the payee wants to be exempted from 30% withholding, a completed image of the most recent (September 2018) IRS Form 8233 must be attached to the request to create a Supplier.
The IRS requires that we submit the original IRS Form 8233, so the original IRS Form 8233 must be sent separately to the Tax Office, 1350 Beardshear, even though an image of the original is attached to the Supplier Invoice.
The purpose of the IRS Form 8233 is to determine whether withholding of federal taxes is necessary. If you already know the payee does not qualify for exemption from withholding, you can skip the IRS Form 8233, include the payee's permanent foreign address in the "Enter Your Comment" section of the Supplier Invoice, and acknowledge that you understand 30% will be withheld.
Please contact Matt Devick (294-0457) if you have questions about the IRS Form 8233.