Form 8233 is an IRS form that non-resident aliens can use to claim an exemption from federal income tax withholding. This form is used if an employee is a resident of another country that has a tax treaty with the US that exempts the employee from some or all federal income taxes.
When to File Form 8233
Form 8233 is only filed if you hire an employee or independent contractor who is a non-resident alien in the United States. A non-resident alien is an individual who is not a US citizen and has been in the US for less than 31 days during the current year.
Non-resident aliens may be exempt from federal income taxes in the US or receive a discounted tax rate if their home country has a tax treaty with the US. In this case, the employee can request to file Form 8233 to be exempted from some or all federal income tax withholding.
How to File Form 8233
Form 8233 must be filled out by the non-resident alien claiming an exemption and signed by both that individual and their employer.
To fill out the form, the employee will need a Taxpayer Identification Number (TIN). This can be a Social Security number or if the employee does not have a Social Security number, an Individual Taxpayer Identification Number (ITIN) can be used. To receive an ITIN, a non-resident alien must file Form W-7 with the IRS and demonstrate that they don’t meet the criteria for a Social Security number.
The IRS can take several weeks to issue an ITIN, but you do not have to wait to file Form 8233. In the absence of a Social Security number or ITIN, the employee can attach a copy of their submitted Form W-7 and proof of non-qualification for a Social Security number to Form 8233.
Once Form 8233 has been filled out and signed by the employee and your business representative, it can be submitted electronically or by mail to the IRS. If the IRS rejects the form for any reason, you must immediately begin withholding federal income taxes from the employee’s paycheck.
Form 8233 is used by employees and independent contractors who are non-resident aliens to claim an exemption from federal income tax withholding. It must be filled out by the employee and signed by both the employee and employer.
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