1. TAX TREATIES Sara Marcotte Accountant Accounting Services

2. U NITED S TATES I NCOME T AX A tax that the government imposes on income earned by individuals. Income tax is a key source of funds that the U.S. government uses to fund its activities and serve the public. Income tax is “withheld” from wages. Can be referred to as “federal withholdings”

3. W HAT IS A T AX T REATY ? Formal written agreement between countries U.S. has tax treaties with a number of countries Residents of foreign countries are taxed at a reduced income tax rate or exempt from U.S. taxes on certain types of income

4. T AX T REATIES -C ONTINUED Not all countries have tax treaties Not all tax treaties are the same. Each country has their own “agreement” with the United States.

5. T AX T REATIES & S TUDENT W AGES Some countries have tax treaties with the United States that exempt student wages from income tax. Certain conditions need to be met in order for student wages to be exempt: 1) Length of time in the United States 2) Amount of Earnings http://www.admin.mtu.edu/acct/dept/tax/nrstudentwages.htm

6. F ORM 8233 Qualify for tax treaty? Fill out form 8233 Form 8233 is a form that exempts your wages from income tax. There will be no “withholdings” from the wages you earn. Must be filled out annually. http://www.admin.mtu.edu/acct/dept/tax/8233info.htm

7. W HAT IF 8233 IS NOT COMPLETED ? When you file tax return at the end of the year – you can be refunded the income tax that was “withheld”.

8. H ELPFUL W EBSITES Tax Treaties: http://www.irs.gov/businesses/internati onal/article/0,,id=96739,00.html http://www.irs.gov/businesses/internati onal/article/0,,id=96739,00.html Summary of Tax Treaties: http://www.irs.gov/pub/irs-pdf/p901.pdf Student Wages & Form 8233: http://www.admin.mtu.edu/acct/dept/tax/ nrstudentwages.htm

9. QUESTIONS? SEE ME! Sara Marcotte sjmarcot@mtu.edu 487-2449