Income tax treaties are bilateral agreements negotiated between the U.S. and governments of around 70 countries. Some tax treaties allow for a partial or complete exemption from federal income tax for a given period of time. Each treaty has specific criteria including nonimmigration status and other stipulations for treaty exemption.
Treaty exemption is based on tax residency, which may or may not be the same as citizenship. The mere existence of a tax treaty does not automatically translate to an employee payroll tax exemption. U.S. wages of a foreign national employee are typically covered in a treaty under a student or teacher/researcher article of the treaty.
Treaty exemptions with student or teacher/researcher articles cover exemption from federal tax withheld from pay.
When the completed Foreign National Information Form is received and the student or teacher/researcher has applied for and received a Social Security number, foreign national tax staff prepares the applicable treaty exemption form for signature. The exemption can be implemented when both the employee and OUHSC withholding agent have signed the form. Granting treaty exemption may be beyond the scope of the institution.
For questions regarding tax status, contact Foreign National Tax staff.
General information regarding individual tax treatiesIRS Publication 901 “U.S. Tax Treaties"
Detail information regarding Individual Tax Treaties