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 it as withholding agent, and retain a copy. You do not send it to the IRS until the IRS specifically requests it, though there's a procedure to submit copies.
The form is valid for one calendar year. It requires a US TIN (SSN or ITIN). You can begin reduced withholding as soon as the signed form is in your files — you don't need to wait for IRS approval for most treaty claims.
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 is valid for three calendar years (or until circumstances change). It does not require a US TIN in all situations, though one is needed to claim treaty benefits at reduced rates.
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 their fellowship stipend. Your institution should have a process to collect both when applicable.
If you're unsure which form applies to a specific payment type, the NRA Tax Wizard walks through the income classification step by step.