8233 (Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual)

WHAT IS THE FORM 8233 AND WHAT IS ITS PURPOSE? 

The 8233  is an IRS mandated form to collect correct Nonresident Alien (NRA) taxpayer information for both individuals and entities for reporting purposes and to document their status for tax reporting purpose.

Internal Revenue Code (IRC), section 1441 requires 30% income tax withholding on compensation for independent personal services.  However, some payments may be exempt from withholding because of a tax treaty. This tax is imposed on the gross amount paid and is generally collected by withholding under section 1441.

A withholding agent or payer of the income may rely on a properly completed form 8233 to treat a payment associated with the form 8233 as a payment to a foreign person who beneficially owns the amounts paid. If applicable, the withholding agent may rely on the form 8233 to apply a reduced rate of, or exemption from, withholding at source also known as a tax treaty benefit.  See applicable tax treaties at Tax Treaties for Independent Contractors and Scholarships.

HOW IS THE FORM 8233 USED?

Form 8233 is used for honorariums if tax treaty exemption applies for Independent Personal Services. To determine if tax treaty applies, refer to Tax Treaties for Independent Contractors and Scholarships. Scroll down to find the country in question, and make sure that a treaty exists for Independent Personal Services income for the particular country.

HOW OFTEN DOES THE FORM 8233  NEED TO BE OBTAINED? 

The UW policy is that a new form 8233 must be obtained for all Nonresident Alien (NRA) payments made by the UW.  Prior year 8233 forms cannot be used in subsequent years because Nonresident Alien (NRA) statuses may change from year-to-year, and even during a calendar year, therefore a new form 8233 must be obtained for all Nonresident Alien (NRA) payments made by the UW.

WHAT VERSIONS OF THE 8233 WILL THE UW ACCEPT? 

The UW will only accept current versions of any Internal Revenue Service (IRS) or Wisconsin Department of Revenue forms.  These can be found at the IRS web page at IRS Forms and the Wisconsin Department of Revenue at WI DOR Forms.

Use of a non-current form will delay payment processing because the non-current form has to be returned to the preparer and the current form must be completed before the payment can be processed in order for the UW to be in compliance with IRS and WI DOR regulations and forms.

WHERE CAN THE 8233 AND ASSOCIATED INSTRUCTIONS BE FOUND?