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I've participated in one of the Hackathon competition on DevPost and won the prize amount of $3000 USD.

However, the claiming section asked me to fill-up the W-8BEN tax form as I'm not a US resident. The form has a field for income type, but not sure about few things.

  1. What should need to be filled in income type?

  2. It is not a lucky draw or kind of gambling though, will I have to pay tax to the US government?

  3. Is there any chance to claim 0% taxes from the US government? or another exception?

  4. What will be the final amount I will receive on-hand?

Other note:
I individually won the award, there is no other team member to share this amount with.

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    My guess is that this is "Other Income" in the sense of the 1989 US–India income tax treaty. Such Other Income is taxable only in the country of residence. This is definitely not a royalty.
    – amon
    Commented Jan 22, 2020 at 13:38
  • @amon, Thanks! I have read that pinned document. Can't it be fall under Article 15? The term “professional services” includes independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, surgeons, lawyers, engineers, architects, dentists and accountants.
    – Div
    Commented Jan 22, 2020 at 13:48
  • You could claim to have provided hacking services, I suppose, but when people are paid for their services, they don’t usually consider the payment to be prize money.
    – Lawrence
    Commented Jan 22, 2020 at 16:51
  • You didn't provide a service. You didn't negotiate a price for your work. If your job had been fry cook and you won the hackathon there wouldn't be a difference.
    – xyious
    Commented Jan 22, 2020 at 22:19
  • @xyious: so what do you think I should need to mention in income type?
    – Div
    Commented Jan 23, 2020 at 6:38

1 Answer 1

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If someone facing the same issue, here is the tip. Fill out Part I, Part II (9) and part III

Leave the Part II (10) blank and submit. You'll get your full amount.

enter image description here

Hope this helps!

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  • Thanks for the update I also won $2000 and was wondering how to avoid tax, would it be the same for an African country?
    – Harry
    Commented Nov 24, 2020 at 16:06
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    Congratulations! perhaps the same for all non US residents. However, it also depends on an agreement between two countries. @Harry
    – Div
    Commented Nov 24, 2020 at 16:12
  • Hey, so for India this works? Also, do you have any idea on what other countries this works for?
    – Karun Shrestha
    Commented Nov 23, 2021 at 13:43
  • @Harry were you able to avoid it, if so how did you do it?
    – Karun Shrestha
    Commented Nov 23, 2021 at 13:51
  • @KarunShrestha No way of avoiding the 30% tax in Africa
    – Harry
    Commented Jan 27, 2022 at 10:08

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