Foreign Student Tax Information
Foreign students receiving certain types of assistance payments that are subject to taxation under federal law may be subject to tax withholding on those payments or scholarships.
When Tax Withholding is not Required
Tax withholding is not required for qualified scholarships from U.S. sources paid to a candidate for a degree. A qualified scholarship is any amount paid to an individual as a scholarship or fellowship grant to the extent that, in accordance with the conditions of the scholarship or grant, the amount is to be used for the following expenses:
- Tuition and fees required for enrollment or attendance at an educational organization.
- Fees, books, supplies, and equipment required for courses of instruction at the educational organization.
When Tax Withholding is Required
Tax withholding is required on that portion of a scholarship or fellowship paid to a nonresident alien that does not constitute a qualified scholarship. For example, those portions of a scholarship designated for room and board are subject to withholding. The current withholding rate is 14% on taxable scholarship and fellowship grants paid to nonresident aliens temporarily present in the United States in "F", "J", "M", or "Q" nonimmigrant status. Payments made to nonresident alien individuals in any other immigration status are subject to 30% withholding.
Tax treaties between the United States and other countries may provide exemption from taxation and withholding. To claim exemption from withholding on scholarships and fellowships, the nonresident alien student, trainee, or researcher must submit Internal Revenue Service (IRS) Form W-8BEN or Form 8233, and provide their Taxpayer Identification Number (TIN), before the treaty can be recognized. IRS Form 8233 may also be used to document exemption from withholding on wages.
Forms (Require Adobe Acrobat Reader)
- IRS Publication 515 - Withholding of Tax on Nonresident Aliens and Foreign Entities
- IRS Publication 519 - U.S. Tax Guide for Aliens
- IRS Publication 901 - U.S. Tax Treaties
- Form W-8BEN (Fill-in) - Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding
- Form W-8BEN (Instructions)
- Form 8233 (Fill-in) - Exemption from Withholding on compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual
- Form 8233 (Instructions)
- Form W-7 - Application for a Taxpayer Identification Number (TIN)
- Other IRS Forms