Tax Treaties 

• Overview

  The United States has income tax treaties with a number of foreign countries. Under these treaties, residents (not necessarily citizens) of foreign countries may be eligible to be taxed at a reduced rate or exempt from U.S. income taxes on certain items of income they receive from sources within the United States. These reduced rates and exemptions vary among countries and specific items of income.

   

  If the treaty does not cover a particular kind of income, or if there is no treaty between your country and the United States, you must pay tax on the income in the same way and at the same rates shown in the instructions for Form 1040NR, U.S. Nonresident Alien Income Tax Return. 

   

  Many of the individual states of the United States tax the income of their residents. Some states honor the provisions of U.S. tax treaties and some states do not. Therefore, you should consult the tax authorities of the state in which you live to find out if that state taxes the income of individuals and, if so, whether the tax applies to any of your income, or whether your income tax treaty applies in the state in which you live.

   

  Tax treaties generally reduce the U.S. taxes of residents of foreign countries as determined under the applicable treaties.

• Can OSU Facilitate a Tax Treaty?

  OSU Tax and Compliance Services (T&C) will examine your tax treaty/immigration documents  (that you provide through Glacier) to verify if a tax treaty is available. 

   

  If a tax treaty is not available, you will be notified via email by T&C.

   

  If a tax treaty is available, T&C will further review the information available (written and verbal communications),  to determine if criteria have been met that allow OSU to facilitate the tax treaty. It is important to note that OSU does not approve or reject tax treaty eligibility, that decision is ultimately made by the Internal Revenue Service.

   

  If T&C determines that OSU will not facilitate a tax treaty claim, you can still make a claim with the IRS upon filing a U.S. Tax Return.

   

  If you are making a claim for tax withholding exemption under an applicable tax treaty (whether facilitated by OSU or not), please note that filing a U.S. Tax Return is a requirement under all tax treaties.

   

  U.S. tax treaties are complex and vary by country. Because of this, OSU will only facilitate tax treaties that fit within certain parameters (as prescribed by the Internal Revenue Code and Treasury Regulations). There are many scenarios that will cause OSU to not facilitate a tax treaty, but here is one common example regarding residency:

  • Per U.S. Treasury (Tax) Regulation Section 1.1441-7, OSU can choose not to facilitate a tax treaty if residency in a treaty country cannot be reasonably determined. This determination is made case-by-case since factors surrounding residency vary.
  • To make a claim for tax withholding exemption under an applicable tax treaty, you are confirming that you were a resident of the tax treaty country at the time of, or immediately, prior to, entry to the United States.
  • If your visa has been issued from a country other than the tax treaty country, OSU will NOT facilitate the tax treaty claim.

• Documents Needed
  • Tax treaty documents include Form 8233 and an accompanying statement.
  • Immigration documents include I-20/DS-2019, I-94 and visa.
  • Tax Treaty documents must be submitted using the Tax and Compliance Services Secure Document Upload Tool. 

• Glacier

  Glacier will generate tax treaty documents if there is a tax treaty with your country of residence.

  • Glacier does NOT approve your tax treaty eligibility; it only provides the documents needed to apply for a claim of a tax withholding exemption under an applicable tax treaty.
  • Tax treaty documents include Form 8233 and an accompanying statement.

• Resident Alien

  If you are a Resident Alien AND eligible to claim an income tax treaty exemption, follow these steps:

  1. Go to www.irs.gov to obtain Form 1040 (and its instructions), Schedule 1, and Schedule OI of Form 1040-NR. Please note that depending on your situation, there may be additional Schedules that also apply to you;.
  2. Complete all of the income lines on Form 1040, as well as any other Schedules, as applicable to you;
  3. On Schedule 1, Line 8z (Other Income), write: “Exempt Income, U.S.-{country} tax treaty, Article {article
     number}.” Also on Schedule 1, Line 8z, enter the total amount you wish to claim as a tax treaty exemption as
     a negative number. Then, in effect, the amount of tax treaty exemption will be subtracted when you enter
     the subtotal on Schedule 1, Line 9. Complete Line 10 as indicated on Schedule 1.
  4. Enter the amount from Schedule 1, Line 10 onto your Form 1040, page 1, Line 8;
  5. On Schedule OI, complete your name and Social Security Number, write "Resident Alien with Tax Treaty
     Exemption” across the top of the page, and complete ONLY Section L;
  6. Attach Schedule 1 and Schedule OI to the back of your Form 1040. If you received a Form 1042-S or
     Form W-2, attach the applicable copies to the front, bottom section of Form 1040;
  7. Regardless of where you live, MAIL your Form 1040, Schedules and other applicable documents to:

  IF NO Additional Tax is Due: 
  Department of the Treasury
  Austin, TX 73301-0215

  (no street address is needed)

   

  IF Additional Tax is Due:

  Internal Revenue Service

  P.O. Box 1303
  Charlotte, NC 28201-1303

   

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• Questions?

  If you have any questions regarding a tax treaty, please contact the Tax and Compliance Services department by sending an email to tax@okstate.edu.