Two Forms, Same Goal — Different Income
Both Form 8233 and Form W-8BEN allow nonresident aliens to claim reduced withholding under a US tax treaty. The difference is the type of income they cover:
| Form | Income Type | Who Uses It |
|---|---|---|
| Form 8233 | Compensation for personal services (wages, salaries, honoraria, independent contractor fees) | Employees and independent contractors who perform services |
| W-8BEN | Passive income (dividends, interest, royalties, scholarships, pensions) | Non-employees receiving passive payments; also used for some service income |
The practical rule: if your nonresident alien is an employee claiming a treaty exemption on wages, use Form 8233. If they're receiving a fellowship stipend, royalty payment, or other passive income, use W-8BEN.
Form 8233 — Key Details
Form 8233 is filed directly with the withholding agent (you, the employer). You review it, sign Part IV as withholding agent if you are satisfied the exemption is warranted, keep a copy, and forward a copy to the IRS within 5 days of accepting it.
A separate Form 8233 is required for each tax year, and also for each withholding agent and each type of income. It requires a US TIN (SSN or ITIN). After you accept the form you must mail a copy to the IRS within 5 days and wait at least 10 days for the IRS to object; absent an objection, the reduced withholding applies retroactively to the covered payments.
Important: Form 8233 can only be used for services performed in the US. If an employee performs services partially in another country, only the US-source portion is addressed by Form 8233.
W-8BEN — Key Details
Form W-8BEN is generally filed with a withholding agent or financial institution but is not employer-specific in the same way as 8233. For scholarships and fellowships, the institution paying the award collects the W-8BEN.
W-8BEN stays valid from the date it is signed through the last day of the third calendar year after the year of signing (or until circumstances change). It does not require a US TIN in all situations; for treaty claims it generally needs either a tax ID from your country of residence or a US ITIN.
The Fellowship Trap
Fellowships, scholarships, and stipends trip up payroll departments constantly. When a graduate student receives a tuition waiver and a living stipend, the payroll question is whether each component is compensation for services (Form 8233 territory) or a scholarship/fellowship (W-8BEN territory).
The IRS distinguishes based on whether the payment requires the student to perform services. Tuition waivers in exchange for teaching assistantship duties can be wages. Pure research fellowships with no required service component are typically scholarships. The distinction matters for both the correct form and the applicable withholding rate.
When Both Forms Apply
A graduate student might need both forms in the same year — an 8233 for their TA wages and a W-8BEN for a fellowship stipend from a different payer. If the same institution pays both and the student claims a treaty exemption on both, one Form 8233 can cover both. Your institution should have a process to collect the right form for each case.
If you're unsure which form applies to a specific payment type, the NRA Tax Wizard walks through the income classification step by step.
Related reading
For a worked example of the form, see how to fill out Form 8233 for Chinese F-1 students. Treaty exemptions differ by country, so compare them in student wage exemptions by country, and check residency status with the substantial presence test.