Tax treaties and your home country: the basics

Step 1 — Understand what a tax treaty does

The U.S. has income tax treaties with a number of countries, under which residents — not necessarily citizens — of those countries may pay a reduced rate, or no U.S. income tax, on certain income from U.S. sources (IRS — Tax treaties). The benefits vary by country and type of income (IRS — Tax treaties).

Three key ideas:

• “Resident” means tax residence, not your passport. Generally, you are a resident of a treaty country if you qualify under its own law and under the treaty’s residency article (IRS — Instructions for Form 8233). For certain students, trainees, teachers and researchers, some treaties only require that you were a resident just before you came (IRS — Publication 519).
• No treaty, or no matching article, means the normal U.S. rules (IRS — Tax treaties).
• Treaties mostly help nonresidents. With certain exceptions, they don’t reduce the U.S. tax of U.S. citizens or residents, who are taxed on their worldwide income (IRS — Tax treaties).

So first check your U.S. tax status: see tax residency for newcomers and, if it changes during the year, the dual-status tax year.

Step 2 — Check whether your country has a treaty

Start with the IRS A to Z list of treaties, which links to each one. Watch for warnings: on October 27, 2026, it marked the treaty with Hungary as terminated and those with Russia and Belarus as partially suspended (IRS — A to Z). Publication 901 adds that the old U.S.–U.S.S.R. treaty still covers nine countries it names, and that the China treaty doesn’t apply to Hong Kong (IRS — Publication 901).

Then read, in order:

1. Publication 901, U.S. Tax Treaties, which shows whether a treaty offers a reduced rate or an exemption (IRS — About Publication 901). The IRS says it is for quick reference only; the current edition is from September 2024 (IRS — Publication 901).
2. The tax treaty tables, which summarize many types of income and give the treaty article for each (IRS — Tax treaty tables).
3. The treaty and its protocols (amendments) for the year of the payment (IRS — Tax treaty tables). Treasury’s treaties page adds “technical explanations” but posts documents when signed, before they enter into force (U.S. Treasury — Treaties) — so a treaty there may not apply yet.

Step 3 — Learn which kinds of income treaties often cover

Conditions differ in every treaty. As general background only, Publication 519 describes common articles (IRS — Publication 519):

• Pay for work: most treaties can exempt pay for work in the U.S. under conditions — typically a stay of no more than 183 days in a 12-month period and pay from a foreign employer (IRS — Publication 519).
• Students, apprentices and trainees: under some treaties, money from abroad for study and living costs is exempt; under some, scholarships and limited pay may be too (IRS — Publication 519).
• Teachers, professors and researchers: under many treaties, those who come temporarily to teach aren’t taxed on teaching pay for the first 2 or 3 years after arrival; many also cover research (IRS — Publication 519).
• Pensions and investments: dividends, interest, rents, royalties, pensions and annuities may be exempt or taxed at a reduced rate (IRS — Publication 519).

Many treaties limit the years you can claim an exemption — usually 4–5 for students, apprentices and trainees, and 2–3 for teachers, professors and researchers (IRS — Publication 519). Treaties are also designed, in part, to reduce double taxation of the same income by both countries (IRS — Publication 514).

Students and exchange visitors: see international student taxes and J-1 exchange visitors.

Step 4 — Understand the “saving clause”

Most treaties have a “saving clause”: the U.S. keeps the right to tax its citizens and residents as if the treaty didn’t exist (IRS — Publication 519). So noncitizens who are U.S. residents for tax purposes generally can’t use treaty benefits (IRS — Publication 519).

Many treaties make exceptions; some cover all U.S. tax residents, others only those who aren’t green card holders (IRS — Publication 519). A student or researcher who becomes a U.S. tax resident keeps an exemption only if the saving clause has an exception for it and the other conditions, including time limits, are still met (IRS — Publication 519). Check the treaty text with a qualified professional.

Step 5 — Tell the payer before you’re paid

A treaty can lower the tax taken out of your payments (“withholding”) (IRS — Publication 519). You claim it by telling the payer (the “withholding agent”) about your foreign status, generally with one of two forms (IRS — Publication 519):

• Form 8233 is for pay for personal services, as an employee or an independent contractor (IRS — Publication 519), including a scholarship that pays you for teaching or research (IRS — Instructions for Form 8233). You need a separate form for each tax year, payer and type of income (IRS — Instructions for Form 8233). It must show your SSN or, if you can’t get one, an ITIN; if you’ve applied, you can attach a copy of the application (IRS — Instructions for Form 8233). Students, teachers and researchers also attach a statement (formats in Publication 519, Appendixes A and B) (IRS — Publication 519).
• Form W-8BEN is for income that isn’t pay for services (IRS — Publication 519) — in most cases, for example, a scholarship that requires no work (IRS — Instructions for Form 8233). It goes to the payer, not the IRS, and generally stays valid until the end of the third calendar year after you sign it (IRS — Instructions for Form W-8BEN). If it becomes wrong — say, you become a U.S. tax resident, or move here after using it to claim treaty benefits — you must tell the payer within 30 days and give a new form (IRS — Instructions for Form W-8BEN).

Pay that a treaty doesn’t cover uses the usual Form W-4 (IRS — Instructions for Form 8233); see your paycheck and withholding. Even with a Form 8233, your employer may have to withhold, because some conditions can only be checked after the year ends; you then file Form 1040-NR to get back any extra tax (IRS — Publication 519). Need a number first? See Social Security number and ITIN.

Step 6 — Report the treaty on your tax return

A treaty doesn’t remove the need to file: the 2025 Form 1040-NR instructions say a nonresident engaged in a U.S. trade or business must file even if their income is exempt by treaty (IRS — Instructions for Form 1040-NR). On Form 1040-NR, item L of Schedule OI asks for the country, the treaty article, the months claimed in earlier years and the exempt amount; you attach any Form 1042-S for that income (IRS — Instructions for Form 1040-NR). Without a Form 8233 at work, you can still claim the exemption on the return, attaching a statement with that form’s information (IRS — Instructions for Form 1040-NR).

Form 8833 discloses a “treaty-based return position” (IRS — About Form 8833). Generally, you attach it if you claim that a treaty overrides or changes U.S. tax law and this lowers your tax (IRS — Publication 519). Exceptions include claims about employee pay, pensions, social security, income of students, trainees and teachers, and amounts totaling no more than $10,000 (IRS — Publication 519). Failing to report when required can bring a $1,000 penalty for each failure (IRS — Publication 519).

Tax residents using a saving-clause exception report it on Form 1040 (IRS — Publication 519). Filing basics: your first U.S. tax return.

Step 7 — Check your state and your home country

• Your state: some states honor U.S. tax treaties and some don’t; the IRS suggests asking your state’s tax agency (IRS — Tax treaties). See state income taxes.
• Tax paid abroad: if you paid foreign income tax on income the U.S. also taxes, you may be able to take a credit or a deduction; individuals claim the credit on Form 1116 (IRS — Foreign tax credit; IRS — About Form 1116).
• Your home country: treaties generally work both ways (IRS — Tax treaties), but the other country’s laws and practices decide how you claim benefits there (IRS — Tax treaty tables); its tax authority can explain its side (IRS — Publication 901). For bank accounts back home, see our FBAR guide.