U.S. Tax Form 8833 Treaty Based Return Position
Updated on April 15, 2025
Reviewed by
Table of Contents
Why is it essential for some US expats to file Form 8833?
Because filing Form 8833 is the gateway to claiming some tax benefits. For many US expats, a tax treaty is a major weapon in combating double taxation from the US and their country of residence.
The US tax system operates under strict rules, and the only way to legally reduce or alter your tax burden from those default rules is through a treaty. So, the IRS needs visibility when you’re invoking that right in some circumstances.
What is Form 8833?
Form 8833, entitled “Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b),” is a legal document by the Internal Revenue Service (IRS) for US taxpayers to report treaty-based tax positions.
This is required when taxpayers claim benefits under a tax treaty to lessen or modify their US tax obligations.
How do tax treaties work?
Tax treaties serve as agreements between two countries designed to ensure that individuals and businesses are not taxed twice on the same income by both countries.
This can be done through reduced tax rates or exemptions on different types of income, such as salaries and wages, interests, and dividends.
These treaties can also clarify which country has the primary right to tax specific income streams.
Do I have to file Form 8833 if I’m in a tax-treaty country?
That is not necessarily the case; simply residing in a country with a tax treaty in the US doesn’t trigger the requirement. The trigger is when you decide to claim a benefit under the tax treaty with the US.
Here are the benefits you can claim under a tax treaty:
- Using the treaty to override standard US tax rules.
- Claiming that the US should not tax certain income.
- Reducing the amount of your US tax based on the treaty.
If you plan on claiming one or all of these benefits, then you must file Form 8833.
Who must file Form 8833?
Here is a list of situations where you might need to file Form 8833:
- If you receive income like interest, dividends, royalties, or income from employment from a foreign source, that is exempt or reduced by a tax treaty.
- If you’re claiming to be a nonresident alien in the US under a tax treaty.
- If you’re a dual-resident taxpayer and want to claim residency in another country for tax purposes under a tax treaty.
Are there exceptions to filing Form 8833?
Yes, below are certain situations that do not require the filing of Form 8833:
- Scholarships and grants: Some scholarships, fellowships, and grants are exempt from tax under a treaty.
- Dividends and interest: Dividends and interest from US sources that are either exempt or taxed at a reduced rate under a treaty.
- Government service payments: Payments received by individuals for government services performed for a foreign government.
- Certain pension distributions: Pension payments made to residents of a treaty country that are exempt from US tax per the treaty.
- Small amounts of income: Income items typically requiring disclosure that do not exceed US$10,000 in total are exempt from reporting.
Need to file US Tax Form 8833? Contact us today.
Where can I check the tax treaty from my host country?
You can find the country you’re living in and download the different tax treaties from the IRS website.
The IRS provides a comprehensive list of tax treaties which shows the details on reduced tax rates and exemptions per country.
If you’re feeling lost with all the information given, you can consult local tax authorities or a tax professional for specific information and guidance.
What details do I need to provide on Form 8833?
To file Form 8833, you need to have the following documents:
- The tax treaty article showing the exemption or reduction of tax.
- A detailed statement explaining the eligibility criteria and your reliance on the treaty.
- The amount of tax obligation that has already been reduced by the treaty.
- Any other documents that support your claim, like residency certificates or income statements.
How do I prepare Form 8833?
Here are the general steps to accomplish and file Form 8833:
- Gather your documents: Complete the documents listed above and download Form 8833.
- Fill in the treaty position:
- Line 1: Indicate the specific treaty article and current country of residence.
- Line 2: Summarize the Internal Revenue Code provision overruled.
- Line 3: State your name, identifying numbers like SSN or ITIN (if available to the taxpayer), and address in the US.
- Line 4: List the provision/s of the limitation on benefits in the treaty that you qualify for.
- Line 5: Disclose if you are specifically required to report a treaty-based return position.
- Line 6: Provide a detailed explanation of your treaty position, providing the necessary details to support your claim.
- Sign and date the form: To complete the form.
- Attach to your tax return: Attach Form 8833 to your tax return and ensure that you file the form with your return by the usual IRS tax deadline.
What if I don’t file Form 8833 with my tax return?
You can get fined US$1,000 if you fail to provide Form 8833.
However, if you don’t claim a tax treaty benefit on your return, you are not obligated to file Form 8833, and there will be no penalties for non-compliance.
It’s important to note that not filing Form 8833 could also result in an unwanted tax liability on your US tax return because of double taxation.
The IRS has sent me a penalty for not filing Form 8833. What can I do?
If you didn’t know you had to file Form 8833, you can write a reasonable cause letter to the IRS explaining it’s your first time and you weren’t aware that Form 8833 needed to be filed.
The IRS may waive the penalty fee if you can provide a reasonable explanation, even if it’s not your first time.
FAQs
What are the common mistakes made when filing Form 8833?
- Incomplete or inaccurate information: including incorrect treaty references
- Not attaching Form 8833 to the annual federal tax return
- Failure to file when required
- Not filing separate forms for different treaty positions
When does Form 8833 need to be filed?
Form 8833 should be filed with your federal tax return whenever you decide to use the tax treaty. You could file it yearly if you reside in countries such as the UK, Canada, Australia, France, and Germany.
Are there specific deadlines for filing Form 8833?
Filing Form 8833 is the same as your tax return deadline which is April 15 (June 15 for the automatic two-month extension for US expats)
Can I electronically file Form 8833 with my tax return?
Yes, Form 8833 can be electronically filed with your tax return if you are using tax software or a tax professional that supports e-filing of this form.
