IN Trade NAFTA

Note: All acronyms are followed by "#" and are defined in the Acronym Index. Additional information on forms (##) and I-9 verification (###) is also provided.

The NAFTA trade agreement created a non-immigrant category for Canadian and Mexican professionals to enter the US and work. Like the H-1B, it is for professional positions which must require a minimum of a Bachelor's degree in a specific field, and the individual must have the specific degree. Although the TN applies to Mexican citizens, it is of little practical value, as the same processing steps must be followed as for an H-1B. Therefore, UW-Madison uses the TN almost exclusively for Canadian citizens ("landed immigrants", the Canadian equivalent of permanent residents, do not qualify). This is a temporary status and TNs should not intend to immigrate. The main advantage of TN status is that no prior INS processing is necessary; the Canadian can get the classification at the border. Type(s) of Payments

  • salary
  • payment for services
  • travel reimbursement
Length of Time to Process
  • no advance processing required; the Canadian does it at the border upon entry
Length of Stay
  • annually renewable, no maximum
Special Conditions
  • limited to Canadian citizens, not landed immigrants
  • cannot intend to immigrate
  • MDs activities are limited to research and teaching; no patient care
Required Document Summary
  • appointment letter from hiring department which includes: full job description; minimum education and/or experience requirements; proposed dates of employment; annual salary
  • proof of Canadian citizenship
  • proof of qualifications
  • application fee
Forms Needed for Payment##

Salary

  • Form W-4 Employee's Withholding Allowance Certificate
  • UW Form 1123 Alien Tax Information Request, attach copy of passport and I-94
  • Form 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, if tax treaty exemption applies and required forms are filed. To determine if tax treaty applies refer to IRS Publication 901, Table 2 (http://www.irs.gov/pub/irs-pdf/p901.pdf) or International Tax Packet section 2 (PDF) or Business Services web page (http://www.bussvc.wisc.edu/acct/tax/foreign/taxtabl1.html ).
  • Social Security Number, Individual Taxpayer Identification Number (ITIN), or copy of filed ITIN application required.

Payment for Services and Travel Reimbursement

  • PIR#, attach copy of passport and I-94 (for employee travel use Travel Expense Report, no copies of immigration documents needed)
  • Social Security Number, Individual Taxpayer Identification Number (ITIN), or copy of filed ITIN application required.
  • Form 8233 Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, if tax treaty exemption applies. To determine if tax treaty applies refer to IRS Publication 901, Table 2 (http://www.irs.gov/pub/irs-pdf/p901.pdf) or International Tax Packet section 2 (PDF) or Business Services web page (http://www.bussvc.wisc.edu/acct/tax/foreign/taxtabl1.html ).
Tax Liability/Withholding
Social Security Tax
FICA withholding required
Federal Tax
Salary:
Taxes are deducted based on "single with one allowance plus $7.60/week, using standard graduated withholding tables, unless tax treaty exemption applies and required forms are filed.

For payroll and tax treaty forms to complete and file refer to the International Tax Packet: PDF. This packet is designed as a self-contained Instruction Manual. Complete the information on the packet worksheet and based on that information you will be able to complete the required forms that will determine your Tax Status while in the United States. The checklist at the end of the packet will ensure that you complete and file all of the necessary forms. If the employee is from a tax treaty country you must determine the Income Code, based on the Job Title, and must submit a completed Form 8233 or W-8BEN and, if required, a Revenue Procedure Statement to be exempt from tax withholding under the treaty (subject to treaty limitations). See packet checklist for appropriate form (8233, W-8BEN, Revenue Procedure Statement) to file. To determine if tax treaty applies refer to IRS Publication 901, Table 2 (http://www.irs.gov/pub/irs-pdf/p901.pdf) or International Tax Packet section 2 (PDF) or Business Services web page (http://www.bussvc.wisc.edu/acct/tax/foreign/taxtabl1.html).

Travel Reimbursement:
none

Payment for Services:
30% withholding, unless tax treaty exemption applies and Form 8233 is filed. To determine if tax treaty applies refer to IRS Publication 901, Table 2 (http://www.irs.gov/pub/irs-pdf/p901.pdf) or International Tax Packet section 2 (PDF) or Business Services web page (http://www.bussvc.wisc.edu/acct/tax/foreign/taxtabl1.html).

State Tax
Salary:
Taxes are deducted based on "single" with one allowance using standard graduated withholding tables, unless tax treaty exemption applies and required forms are filed. To determine if tax treaty applies refer to IRS Publication 901, Table 2 (http://www.irs.gov/pub/irs-pdf/p901.pdf) or International Tax Packet section 2 (PDF) or Business Services web page (http://www.bussvc.wisc.edu/acct/tax/foreign/taxtabl1.html ).

For payroll and tax treaty forms to complete and file refer to the International Tax Packet: PDF. This packet is designed as a self-contained Instruction Manual. Complete the information on the packet worksheet and based on that information you will be able to complete the required forms that will determine your Tax Status while in the United States. The checklist at the end of the packet will ensure that you complete and file all of the necessary forms. If the employee is from a tax treaty country you must determine the Income Code, based on the Job Title, and must submit a completed Form 8233 or W-8BEN and, if required, a Revenue Procedure Statement to be exempt from tax withholding under the treaty (subject to treaty limitations). See packet checklist for appropriate form (8233, W-8BEN, Revenue Procedure Statement) to file. To determine if tax treaty applies refer to IRS Publication 901, Table 2 (http://www.irs.gov/pub/irs-pdf/p901.pdf) or International Tax Packet section 2 (PDF) or Business Services web page (http://www.bussvc.wisc.edu/acct/tax/foreign/taxtabl1.html ).

Travel Reimbursement:
none

Payment for Services:
none

I-9 Verification###
  • valid I-94 with TN notation

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