Guide to Global Payroll Management - 2020 - D-35

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Appendix D--Federal Forms and Instructions

Exceptions Tables (continued)
Exception #2 (continued)
Note. Federal tax withholding and/or information reporting must take place within the current tax year.
2(b).
Scholarships,
Fellowships,
and Grants

Claiming the
benefits of a tax
treaty

Persons who are eligible to claim Exception 2(b)
include:
Individuals claiming the benefits of a tax treaty who:
* Are either exempt from or subject to a reduced rate of
tax on their income from scholarships, fellowships, or
grants (that is, foreign students, scholars, professors,
researchers, foreign visitors, or any other individual);
and
* Will be submitting Form W-8BEN to the withholding
agent.
Note. Student and Exchange Visitor Program
(SEVP)-approved institutions for nonresident alien
students and exchange visitors and their spouses and
dependents classified under section 101(a)(15)(F), (M), or
(J) of the Immigration and Nationality Act {8 U.S.C. 1101(a)
(15)(F), (M), or (J)}: A certification letter is required for
each Form W-7 application: primary, associated
secondary (spouse), and dependent(s).1
The certification letter from an SEVP-approved institution
serves as a substitute for submission of original supporting
identification documents with Form W-7. The certification
letter must:
* Be on original, official college, university, or institution
letterhead with a verifiable address;
* Provide the applicant's full name and Student
Exchange Visitor's Information System (SEVIS) number;
* Certify the applicant's registration in SEVIS;
* Certify that the student presented an unexpired
passport, visa, or other identification documents for review
(Exception: a U.S. visa isn't required if the foreign address
is in Canada or Mexico);
* List the identification documents provided to verify
identity and foreign status;
* Be signed and dated by a SEVIS official: Principal
Designated School Official (PDSO), Designated School
Official (DSO), Responsible Officer (RO), or Alternate
Responsible Officer (ARO) of a certified school exchange
program with a verifiable contact telephone number;
* Attach copies of documents used to verify the
applicant's identity and foreign status from the approved
list of documents presented in the Form W-7 instructions
(passport must include a copy of the valid visa issued by
the U.S. Department of State). A U.S. visa isn't required if
the foreign address is in Canada or Mexico;
* Attach a copy of Form DS-2019, Certificate of Eligibility
for Exchange Visitor (J-1) Status and/or a copy of Form
I-20, Certificate of Eligibility for Nonimmigrant Student
Status;
* Form W-7 must include the treaty country and article
number that supports claiming a tax treaty benefit; and
* Include a letter from the DSO or RO stating that the
applicant won't be securing employment in the United
States or receiving any type of income from personal
services.
1

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Documentation you must submit if you're eligible to
claim Exception 2(b):

* A letter or official notification from the college or university
awarding the noncompensatory scholarship, fellowship, or
grant; or
* A copy of a contract with a college, university, or
educational institution;
along with:
* A copy of your passport showing the valid visa issued by
the U.S. Department of State,
* Evidence (information) on the Form W-7 that you're
entitled to claim the benefits of a tax treaty,
* A copy of the Form W-8BEN that was submitted to the
withholding agent, and
* A letter from the Social Security Administration2 stating
that you're ineligible to receive a social security number
(SSN).
If you're a student on an F-1, J-1, or M-1 visa who won't be
working while studying in the United States, you won't have
to apply for an SSN. You will be permitted to provide a letter
from the Designated School Official (DSO) or Responsible
Officer (RO) stating that you won't be securing employment
in the United States or receiving any type of income from
personal services.

2

Instructions for Form W-7 (Rev. September 2019)

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