FMS clarifies tax exemption for international faculty

By Jayne Spencer

• In order to claim tax treaty benefits, an individual must submit certain immigration documents to the FMS Customer Service office and complete certain IRS forms. A social security number (SSN) or individual taxpayer identification number (ITIN) is necessary to complete the required forms. Normally, FMS must have a copy of the social security card or ITIN letter as proof of the number. However, form 8233, which covers compensation for independent and dependent services (as opposed to scholarship/fellowship income or royalties), permits an application for a SSN or ITIN to be substituted for a SSN or ITIN. In most cases, the letter from the social security office confirming that a number has been applied for will not satisfy this requirement—only a copy of the actual application is an adequate substitute for presenting the social security card or ITIN. Those individuals who might wish to claim tax treaty benefits of this requirement should be advised so that they may make a copy of their SSN application or ITIN application before submitting it to the social security office or acceptance agent.

• In contrast, form W8-BEN, for scholarship/fellowship and royalty income, does not permit any substitution for the SSN or ITIN.

• FMS has updated its Web site to include more information on payments to individuals with non-resident alien status. It contains detailed descriptions of the documentation required to permit payments to short-term visitors and others with non-resident alien status. Department personnel may wish to visit this Web site, especially before a proposed visitor arrives in the United States. The page is set up as a guide through the payment requirements based on the individual’s visa type and the reason for payment.

Questions should be addressed to Theresa Richards, FMS, Non-resident Alien Tax Compliance, 812-856-5424; theerich@indiana.edu

http://www.fms.indiana.edu/tax/NRA/FVTguide.asp