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Income Entitled to Tax Treaty Benefits: U.S. Taxes for Noncitizens (2025 IRS Guide)

This guide covers “Income Entitled to Tax Treaty Benefits” within u.s. taxes for noncitizens. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 519 (2025), U.S. Tax Guide for Aliens, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Income Entitled to Tax Treaty Benefits

If a tax treaty between the United States and your country of residence provides an exemption from, or a reduced rate of, tax for certain items of income, you should notify the payer of the income (the withholding agent) of your foreign status to claim a tax treaty withholding exemption or reduced withholding rate. Generally, you do this by filing either Form W-8BEN or Form 8233 with the withholding agent.

File Form W-8BEN for income that is not personal services income. File Form 8233 for personal services income, as discussed next.

Tip:

If you qualify for an exemption under a tax treaty but did not submit a Form 8233 to your withholding agent to claim an exemption from withholding, you can still get the benefit of the exemption by filing a Form 1040-NR. Follow the instructions for line 1a of the Form 1040-NR.

Employees and independent contractors.

If you perform personal services as an employee or as an independent contractor and you can claim an exemption from withholding on that personal services income because of a tax treaty, give Form 8233 to each withholding agent from whom amounts will be received.

Even if you submit Form 8233, the withholding agent may have to withhold tax from your income. This is because the factors on which the treaty exemption is based may not be determinable until after the close of the tax year. In this case, you must file Form 1040-NR to recover any overwithheld tax and to provide the IRS with proof that you are entitled to the treaty exemption.

Students, teachers, and researchers.

Students, teachers, and researchers must attach the appropriate statement shown in Appendix A (for students) or Appendix B (for teachers and researchers) at the end of this publication to the Form 8233 and give it to the withholding agent. For treaties not listed in the appendices, attach a statement in a format similar to those for other treaties.

If you received a scholarship or fellowship grant, as well as personal services income, from the same withholding agent, use Form 8233 to claim an exemption from withholding based on a tax treaty for both types of income.

Note:

Form 8233 can be used when you are claiming an exemption for scholarship or fellowship income (that is not compensation) only if you are also claiming a treaty withholding exemption for personal services income. Otherwise, you must use Form W-8BEN.

Special events and promotions.

Withholding at the full 30% rate is required for payments made to a nonresident alien or foreign corporation for gate receipts (or television or other receipts) from music festivals, boxing promotions, and other entertainment or sporting events, unless the withholding agent has been specifically advised otherwise by letter from the IRS. Depending on the calendar year in which the U.S. gross income is earned, Form 13930 can be used to request a reduction in withholding. Withholding may be required even if the income may be exempt from taxation by provisions of a tax treaty. One reason for this is that the partial or complete exemption is usually based on factors that cannot be determined until after the close of the tax year.

For more information on how to apply for a CWA, see Form 13930 and go to IRS.gov/CWA.

Caution:

You will be required to pay U.S. tax at the time of your departure from the United States on any income for which you incorrectly claimed a treaty exemption. For more details on treaty provisions that apply to compensation, see Pub. 901.

Tax withheld on real property sales.

If you are a nonresident alien and you disposed of a U.S. real property interest, the transferee (buyer) of the property must generally withhold a tax equal to 15% of the amount realized on the disposition.

However, if the property is acquired by the buyer for use as a residence and the amount realized does not exceed $1 million, the rate of withholding is 10%.

The amount realized is the sum of:

  • The cash paid, or to be paid (principal only);

  • The fair market value of other property transferred, or to be transferred; and

  • The amount of any liability assumed by the transferee or to which the property is subject immediately before and after the transfer.

If the property transferred was owned jointly by U.S. and foreign persons, the amount realized is allocated between the transferors based on the capital contribution of each transferor.

A distribution by a QIE to a nonresident alien shareholder that is treated as gain from the sale or exchange of a U.S. real property interest by the shareholder is subject to withholding at 21%. Withholding is also required on certain distributions and other transactions by domestic or foreign corporations, partnerships, trusts, and estates. These rules are covered in Pub. 515 and in the Instructions for Form 8288.

For information on the tax treatment of dispositions of U.S. real property interests, see Real Property Gain or Loss in chapter 4.

If you are a partner in a domestic partnership, and the partnership disposes of a U.S. real property interest at a gain, the partnership will withhold tax on the amount of gain allocable to its foreign partners. Your share of the income and tax withheld will be reported to you on Form 8805 or Form 1042-S (in the case of a PTP).

Note:

For exceptions when withholding is not required, see Exceptions under U.S. Real Property Interest in Pub. 515.

Withholding certificates.

The tax required to be withheld on a disposition can be reduced or eliminated under a withholding certificate issued by the IRS. In most cases, either you or the buyer can request a withholding certificate.

See Withholding Certificates under U.S. Real Property Interest in Pub. 515 and IRS.gov/Individuals/International-Taxpayers/Withholding-Certificates for information on procedures to request a withholding certificate.

Credit for tax withheld.

The buyer must report and pay over the withheld tax within 20 days after the transfer using Form 8288. This form is filed with the IRS with copies A and B of Form 8288-A. Copy B of this statement will be stamped received by the IRS and returned to you (the seller) if the statement is complete and includes your TIN. You must file Copy B with your tax return to take credit for the tax withheld.

A stamped copy of Form 8288-A will not be provided to you if your TIN is not included on that form. The IRS will send you a letter requesting the TIN and provide instructions for how to get a TIN. When you provide the IRS with a TIN, the IRS will provide you with a stamped Copy B of Form 8288-A.

Refunds of certain withholding tax delayed.

Refund requests for tax withheld and reported on Form 1042-S, Form 8288-A, or Form 8805 may require additional time for processing. Allow up to 6 months for these refunds to be issued.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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