Guide to Global Payroll Management - 2020 - D-36

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Guide to Global Payroll Management

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

Persons who are eligible to claim Exception 2(c)
include:

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

Individuals (that is, foreign students, scholars, professors,
researchers, or any other individuals) receiving
noncompensatory income from scholarships, fellowships,
or grants that's subject to IRS information-reporting and/or
withholding requirements during the current year.

* A letter or official notification from the educational
institution (that is, 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 (a U.S. visa isn't required if the
foreign address is in Canada or Mexico);
* A letter from the DSO or RO stating that you're receiving
noncompensatory income from scholarships, fellowships, or
grants that's subject to IRS information-reporting and/or
federal tax withholding requirements during the current year
(this letter must be attached to your Form W-7 or your
application for an ITIN will be denied); and
* A letter from the Social Security Administration3 stating
that you're ineligible to receive a social security number
(SSN).

Not claiming
benefits of a tax
treaty

3
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 DSO or RO stating that you won't be securing
employment in the United States or receiving any type of
income from personal services.

Exception #2 (continued)
Note. Federal tax withholding and/or information reporting must take place within the current tax year.
2(d). Gambling
Income
Claiming the
benefits of a tax
treaty

Persons who are eligible to claim Exception 2(d) include:
Nonresident aliens visiting the United States who:
* Have gambling winnings,
* Are claiming the benefits of a tax treaty for an exempt or
reduced rate of federal tax withholding on that income, and
* Will be utilizing the services of a gaming official as an IRS ITIN
Acceptance Agent.

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

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Documentation you must submit if you're eligible to claim
Exception 2(d):
Your Form W-7, which must be submitted through the services of
an appropriate gaming official serving as an IRS ITIN Acceptance
Agent to apply for an ITIN under Exception 2(d).
Note. If you don't secure the services of a gaming official, you may
still file Form 1040-NR at the end of the tax year with a Form W-7,
attaching a copy of Form 1042-S displaying the amount of tax
withheld. Your Form 1040-NR also should display the tax treaty
article number and country under which you're claiming the treaty
benefits.

Guide to Global Payroll Management - 2020

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