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The IRS 1042-S form is a tax document used to report income paid to foreign individuals, partnerships, and corporations. This form is essential for withholding tax purposes and ensures compliance with U.S. tax regulations. Familiarize yourself with the requirements to avoid potential issues.

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Article Guide

The IRS 1042-S form plays a crucial role in the taxation process for foreign individuals and entities who earn income in the United States. Specifically designed to report various types of income, including royalties, rents, and compensation for services, it is an essential document for any non-resident alien who has received income subject to U.S. tax withholding. Each year, withholding agents, such as employers or financial institutions, must complete this form to disclose the amount of income paid and any tax withheld. Additionally, the IRS 1042-S helps ensure compliance with tax regulations, which can be particularly complex for foreign individuals who may not be familiar with U.S. tax laws. Ensuring accurate reporting not only protects the interests of the tax authorities but also aids recipients in fulfilling their own tax obligations, whether they are filing a U.S. tax return or applying for a refund. For those involved in international income transactions, understanding the key elements of the 1042-S form is vital, as it impacts tax liabilities and compliance across borders.

Foreign Person’s U.S. Source Income Subject to Withholding

2021

OMB No. 1545-0096

Department of the Treasury

Copy A for

Form 1042-S

▶ Go to www.irs.gov/Form1042S for instructions and the latest information.

Internal Revenue Service

UNIQUE FORM IDENTIFIER

AMENDED

AMENDMENT NO.

Internal Revenue Service

1 Income

2 Gross income

3 Chapter indicator. Enter “3” or “4”

13e

Recipient’s U.S. TIN, if any

13f

Ch. 3 status code

code

3a Exemption code

4a Exemption code

13g Ch. 4 status code

3b Tax rate

4b Tax rate

13h

Recipient’s GIIN

13i Recipient’s foreign tax identification

13j LOB code

number, if any

5 Withholding allowance

6 Net income

7a Federal tax withheld

13k

Recipient’s account number

7b Check if federal tax withheld was not deposited with the IRS because

escrow procedures were applied (see instructions)

13l Recipient’s date of birth (YYYYMMDD)

7c Check if withholding occurred in subsequent year with respect to a

partnership interest

8 Tax withheld by other agents

14a

Primary Withholding Agent’s Name (if applicable)

9Overwithheld tax repaid to recipient pursuant to adjustment procedures (see instructions)

11Tax paid by withholding agent (amounts not withheld) (see instructions)

15d Intermediary or flow-through entity’s name

12a

Withholding agent’s EIN

12b Ch. 3 status code

12c Ch. 4 status code

15e

Intermediary or flow-through entity’s GIIN

12d Withholding agent’s name

15f Country code

15g Foreign tax identification number, if any

12e

Withholding agent’s Global Intermediary Identification Number (GIIN)

15h

Address (number and street)

12f

Country code

12g

Foreign tax identification number, if any

15i

City or town, state or province, country, ZIP or foreign postal code

12h

Address (number and street)

16a

Payer’s name

16b Payer’s TIN

12i City or town, state or province, country, ZIP or foreign postal code

16c

Payer’s GIIN

16d Ch. 3 status code

16e Ch. 4 status code

13a

Recipient’s name

13b Recipient’s country code

17a

State income tax withheld

17b Payer’s state tax no.

17c Name of state

13c Address (number and street)

13d City or town, state or province, country, ZIP or foreign postal code

For Privacy Act and Paperwork Reduction Act Notice, see instructions.

Cat. No. 11386R

Form 1042-S (2021)

Form 1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

2021

OMB No. 1545-0096

▶ Go to www.irs.gov/Form1042S for instructions and the latest information.

Copy B

Department of the Treasury

Internal Revenue Service

UNIQUE FORM IDENTIFIER

AMENDED

AMENDMENT NO.

for Recipient

1 Income

2 Gross income

3 Chapter indicator. Enter “3” or “4”

13e

Recipient’s U.S. TIN, if any

13f

Ch. 3 status code

code

3a Exemption code

4a Exemption code

13g Ch. 4 status code

3b Tax rate

4b Tax rate

13h

Recipient’s GIIN

13i Recipient’s foreign tax identification

13j LOB code

number, if any

5 Withholding allowance

6 Net income

7a Federal tax withheld

13k

Recipient’s account number

7b Check if federal tax withheld was not deposited with the IRS because

escrow procedures were applied (see instructions)

13l Recipient’s date of birth (YYYYMMDD)

7c Check if withholding occurred in subsequent year with respect to a

partnership interest

8 Tax withheld by other agents

14a

Primary Withholding Agent’s Name (if applicable)

9Overwithheld tax repaid to recipient pursuant to adjustment procedures (see instructions)

11Tax paid by withholding agent (amounts not withheld) (see instructions)

15d Intermediary or flow-through entity’s name

12a

Withholding agent’s EIN

12b Ch. 3 status code

12c Ch. 4 status code

15e

Intermediary or flow-through entity’s GIIN

12d Withholding agent’s name

15f Country code

15g Foreign tax identification number, if any

12e

Withholding agent’s Global Intermediary Identification Number (GIIN)

15h

Address (number and street)

12f

Country code

12g

Foreign tax identification number, if any

15i

City or town, state or province, country, ZIP or foreign postal code

12h

Address (number and street)

16a

Payer’s name

16b Payer’s TIN

12i City or town, state or province, country, ZIP or foreign postal code

16c

Payer’s GIIN

16d Ch. 3 status code

16e Ch. 4 status code

13a

Recipient’s name

13b Recipient’s country code

17a

State income tax withheld

17b Payer’s state tax no.

17c Name of state

13c Address (number and street)

13d City or town, state or province, country, ZIP or foreign postal code

(keep for your records)

Form 1042-S (2021)

U.S. Income Tax Filing Requirements

Generally, every nonresident alien individual, nonresident alien fiduciary, and foreign corporation with U.S. income, including income that is effectively connected with the conduct of a trade or business in the United States, must file a U.S. income tax return. However, no return is required to be filed by a nonresident alien individual, nonresident alien fiduciary, or foreign corporation if such person was not engaged in a trade or business in the United States at any time during the tax year and if the tax liability of such person was fully satisfied by the withholding of U.S. tax at the source. Corporations file Form 1120-F; all others file Form 1040-NR. You may get the return forms and instructions at IRS.gov, at any U.S. Embassy or consulate, or by writing to: Internal Revenue Service, 1201 N. Mitsubishi Motorway, Bloomington, IL 61705-6613.

En règle générale, tout étranger non-résident, tout organisme fidéicommissaire étranger non-résident et toute société étrangère percevant un revenu aux Etats-Unis, y compris tout revenu dérivé, en fait, du fonctionnement d’un commerce ou d’une affaire aux Etats- Unis, doit produire une déclaration d’impôt sur le revenu auprès des services fiscaux des Etats-Unis. Cependant aucune déclaration d’impôt sur le revenu n’est exigée d’un étranger non-résident, d’un organisme fidéicommissaire étranger non-résident, ou d’une société étrangère s’ils n’ont pris part à aucun commerce ou affaire aux Etats- Unis à aucun moment pendant l’année fiscale et si les impôts dont ils sont redevables, ont été entièrement acquittés par une retenue à la source sur leur salaire. Les sociétés doivent faire leur déclaration d’impôt en remplissant le formulaire 1120-F; tous les autres redevables doivent remplir le formulaire 1040-NR. On peut se procurer les formulaires de déclarations d’impôts et les instructions y afférentes

àIRS.gov et dans toutes les ambassades et tous les consulats des Etats-Unis. L’on peut également s’adresser pour tout renseignement à: Internal Revenue Service, 1201 N. Mitsubishi Motorway, Bloomington, IL 61705-6613.

Por regla general, todo extranjero no residente, todo organismo fideicomisario extranjero no residente y toda sociedad anónima extranjera que reciba ingresos en los Estados Unidos, incluyendo ingresos relacionados con la conducción de un negocio o comercio dentro de los Estados Unidos, deberá presentar una declaración estadounidense de impuestos sobre el ingreso. Sin embargo, no se requiere declaración alguna a un individuo extranjero, una sociedad anónima extranjera u organismo fideicomisario extranjero no residente, si tal persona no ha efectuado comercio o negocio en los Estados Unidos durante el año fiscal y si la responsabilidad con los impuestos de tal persona ha sido satisfecha plenamente mediante retención del impuesto de los Estados Unidos en la fuente. Las sociedades anónimas envían el Formulario 1120-F; todos los demás contribuyentes envían el Formulario 1040-NR. Se podrá obtener formularios e instrucciones en IRS.gov y en cualquier Embajada o Consulado de los Estados Unidos o escribiendo directamente a: Internal Revenue Service, 1201 N. Mitsubishi Motorway, Bloomington, IL 61705-6613.

Im allgemeinen muss jede ausländische Einzelperson, jeder ausländische Bevollmächtigte und jede ausländische Gesellschaft mit Einkommen in den Vereinigten Staaten, einschliesslich des Einkommens, welches direkt mit der Ausübung von Handel oder Gewerbe innerhalb der Staaten verbunden ist, eine Einkommensteuererklärung der Vereinigten Staaten abgeben. Eine Erklärung, muss jedoch nicht von Ausländern, ausländischen Bevollmächtigten oder ausländischen Gesellschaften in den Vereinigten Staaten eingereicht werden, falls eine solche Person während des Steuerjahres kein Gewerbe oder Handel in den Vereinigten Staaten ausgeübt hat und die Steuerschuld durch Einbehaltung der Steuern der Vereinigten Staaten durch die Einkommensquelle abgegolten ist. Gesellschaften reichen den Vordruck 1120-F ein; alle anderen reichen das Formblatt 1040-NR ein. Einkommensteuererklärungen und Instruktionen können unter IRS.gov und bei den Botschaften und Konsulaten der Vereinigten Staaten eingeholt werden. Um weitere Informationen wende man sich bitte an: Internal Revenue Service, 1201 N. Mitsubishi Motorway, Bloomington, IL 61705-6613.

Explanation of Codes

Box 1. Income Code.

Code	Types of Income

01Interest paid by U.S. obligors—general

02Interest paid on real property mortgages

03Interest paid to controlling foreign corporations

04Interest paid by foreign corporations

05Interest on tax-free covenant bonds

	22	Interest paid on deposit with a foreign branch of a domestic
Interest	30	corporation or partnership
Interest	30	Original issue discount (OID)
	29	Deposit interest
	31	Short-term OID
	33	Substitute payment—interest
	51	Interest paid on certain actively traded or publicly offered
		securities1
	54	Substitute payments—interest from certain actively traded
		or publicly offered securities1
Dividend	06	Dividends paid by U.S. corporations—general
Dividend	07	Dividends qualifying for direct dividend rate
	07	Dividends qualifying for direct dividend rate
	08	Dividends paid by foreign corporations

	34	Substitute payment—dividends
	40	Other dividend equivalents under IRC section 871(m)
Dividend		(formerly 871(l))
Dividend	52	securities1
	52	Dividends paid on certain actively traded or publicly offered
	53	Substitute payments-dividends from certain actively traded or
		publicly offered securities1
	09	Capital gains
	10	Industrial royalties
	11	Motion picture or television copyright royalties
	12	Other royalties (for example, copyright, software,
		broadcasting, endorsement payments)
Other	13	Royalties paid on certain publicly offered securities1
Other	14	Real property income and natural resources royalties
	15	Pensions, annuities, alimony, and/or insurance premiums
	16	Scholarship or fellowship grants
	17	Compensation for independent personal services2
	18	Compensation for dependent personal services2
	19	Compensation for teaching2

See back of Copy C for additional codes

1This code should only be used if the income paid is described in Regulations section 1.1441-6(c)(2) and the withholding agent has reduced the rate of withholding under an income tax treaty without the recipient providing a U.S. or foreign TIN.

2If compensation that otherwise would be covered under Income Codes 17 through 20 is directly attributable to the recipient’s occupation as an artist or athlete, use Income Code 42 or 43 instead.

Form 1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

2021

OMB No. 1545-0096

Department of the Treasury

▶ Go to www.irs.gov/Form1042S for instructions and the latest information.

Copy C for Recipient

Internal Revenue Service

UNIQUE FORM IDENTIFIER

AMENDED

AMENDMENT NO.

Attach to any Federal tax return you file

1 Income

2 Gross income

3 Chapter indicator. Enter “3” or “4”

13e

Recipient’s U.S. TIN, if any

13f

Ch. 3 status code

code

3a Exemption code

4a Exemption code

13g Ch. 4 status code

3b Tax rate

4b Tax rate

13h

Recipient’s GIIN

13i Recipient’s foreign tax identification

13j LOB code

number, if any

5 Withholding allowance

6 Net income

7a Federal tax withheld

13k

Recipient’s account number

7b Check if federal tax withheld was not deposited with the IRS because

escrow procedures were applied (see instructions)

13l Recipient’s date of birth (YYYYMMDD)

7c Check if withholding occurred in subsequent year with respect to a

partnership interest

8 Tax withheld by other agents

14a

Primary Withholding Agent’s Name (if applicable)

9Overwithheld tax repaid to recipient pursuant to adjustment procedures (see instructions)

11Tax paid by withholding agent (amounts not withheld) (see instructions)

15d Intermediary or flow-through entity’s name

12a

Withholding agent’s EIN

12b Ch. 3 status code

12c Ch. 4 status code

15e

Intermediary or flow-through entity’s GIIN

12d Withholding agent’s name

15f Country code

15g Foreign tax identification number, if any

12e

Withholding agent’s Global Intermediary Identification Number (GIIN)

15h

Address (number and street)

12f

Country code

12g

Foreign tax identification number, if any

15i

City or town, state or province, country, ZIP or foreign postal code

12h

Address (number and street)

16a

Payer’s name

16b Payer’s TIN

12i City or town, state or province, country, ZIP or foreign postal code

16c

Payer’s GIIN

16d Ch. 3 status code

16e Ch. 4 status code

13a

Recipient’s name

13b Recipient’s country code

17a

State income tax withheld

17b Payer’s state tax no.

17c Name of state

13c Address (number and street)

13d City or town, state or province, country, ZIP or foreign postal code

Form 1042-S (2021)

Explanation of Codes (continued)

	20	Compensation during studying and training2
	23	Other income
	24	Qualified investment entity (QIE) distributions of capital
		gains
	25	Trust distributions subject to IRC section 1445
	26	Unsevered growing crops and timber distributions by a trust
		subject to IRC section 1445
	27	Publicly traded partnership distributions subject to IRC
		section 1446
	28	Gambling winnings3
	32	Notional principal contract income4
Other	35	Substitute payment—other
Other	36	Capital gains distributions
	36	Capital gains distributions
	37	Return of capital
	38	Eligible deferred compensation items subject to IRC section
		877A(d)(1)
	39	Distributions from a nongrantor trust subject to IRC section
		877A(f)(1)

41Guarantee of indebtedness

42Earnings as an artist or athlete—no central withholding agreement5

43Earnings as an artist or athlete—central withholding agreement5

44Specified federal procurement payments

50Income previously reported under escrow procedure6

55Taxable death benefits on life insurance contracts

Boxes 3a and 4a. Exemption Code (applies if the tax rate entered in box 3b or 4b is 00.00).

CodeAuthority for Exemption Chapter 3

01Effectively connected income

02Exempt under IRC7

03Income is not from U.S. sources

04Exempt under tax treaty

05Portfolio interest exempt under IRC

06QI that assumes primary withholding responsibility

07WFP or WFT

08U.S. branch treated as U.S. Person

09Territory FI treated as U.S. Person

10QI represents that income is exempt

11QSL that assumes primary withholding responsibility

12Payee subjected to chapter 4 withholding

22QDD that assumes primary withholding responsibility

23Exempt under section 897(l)

24Exempt under section 892

Chapter 4

13Grandfathered payment

14Effectively connected income

15Payee not subject to chapter 4 withholding

16Excluded nonfinancial payment

17Foreign Entity that assumes primary withholding responsibility

18U.S. Payees—of participating FFI or registered deemed- compliant FFI

19Exempt from withholding under IGA8

20Dormant account9

21Other—payment not subject to chapter 4 withholding

Boxes 12b, 12c, 13f, 13g, 15b, 15c, 16d, and 16e. Withholding Agent, Recipient, Intermediary, and Payer Chapter 3 and Chapter 4 Status Codes.

Type of Recipient, Withholding Agent, Payer, or Intermediary Code

Chapter 3 Status Codes

03Territory FI—treated as U.S. Person

04Territory FI—not treated as U.S. Person

05U.S. branch—treated as U.S. Person

06U.S. branch—not treated as U.S. Person

07U.S. branch—ECI presumption applied

08Partnership other than Withholding Foreign Partnership

09Withholding Foreign Partnership

See back of Copy D for additional codes

2If compensation that otherwise would be covered under Income Codes 17 through 20 is directly attributable to the recipient’s occupation as an artist or athlete, use Income Code 42 or 43 instead.

3Subject to 30% withholding rate unless the recipient is from one of the treaty countries listed under Gambling winnings (Income Code 28) in Pub. 515.

4Use appropriate Interest Income Code for embedded interest in a notional principal contract.

5Income Code 43 should only be used if Letter 4492, Venue Notification, has been issued by the Internal Revenue Service (otherwise, use Income Code 42 for earnings as an artist or athlete). If Income Code 42 or 43 is used, Recipient Code 22 (artist or athlete) should be used instead of Recipient Code 16 (individual), 15 (corporation), or 08 (partnership other than withholding foreign partnership).

6Use only to report gross income the tax for which is being deposited in the current year because such tax was previously escrowed for chapters 3 and 4 and the withholding agent previously reported the gross income in a prior year and checked the box to report the tax as not deposited under the escrow procedure. See the instructions to this form for further explanation.

7This code should only be used if no other specific chapter 3 exemption code applies.

8Use only to report a U.S. reportable account or nonconsenting U.S. account that is receiving a payment subject to chapter 3 withholding.

9Use only if applying the escrow procedure for dormant accounts under Regulations section 1.1471-4(b)(6). If tax was withheld and deposited under chapter 3, do not check box 7b (“tax not deposited with IRS pursuant to escrow procedure”). You must instead enter “3” in box 3 and complete box 3b.

Form 1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

2021

OMB No. 1545-0096

Department of the Treasury

▶ Go to www.irs.gov/Form1042S for instructions and the latest information.

Copy D for Recipient

Internal Revenue Service

UNIQUE FORM IDENTIFIER

AMENDED

AMENDMENT NO.

Attach to any state tax return you file

1 Income

2 Gross income

3 Chapter indicator. Enter “3” or “4”

13e

Recipient’s U.S. TIN, if any

13f

Ch. 3 status code

code

3a Exemption code

4a Exemption code

13g Ch. 4 status code

3b Tax rate

4b Tax rate

13h

Recipient’s GIIN

13i Recipient’s foreign tax identification

13j LOB code

number, if any

5 Withholding allowance

6 Net income

7a Federal tax withheld

13k

Recipient’s account number

7b Check if federal tax withheld was not deposited with the IRS because

escrow procedures were applied (see instructions)

13l Recipient’s date of birth (YYYYMMDD)

7c Check if withholding occurred in subsequent year with respect to a

partnership interest

8 Tax withheld by other agents

14a

Primary Withholding Agent’s Name (if applicable)

9Overwithheld tax repaid to recipient pursuant to adjustment procedures (see instructions)

11Tax paid by withholding agent (amounts not withheld) (see instructions)

15d Intermediary or flow-through entity’s name

12a

Withholding agent’s EIN

12b Ch. 3 status code

12c Ch. 4 status code

15e

Intermediary or flow-through entity’s GIIN

12d Withholding agent’s name

15f Country code

15g Foreign tax identification number, if any

12e

Withholding agent’s Global Intermediary Identification Number (GIIN)

15h

Address (number and street)

12f

Country code

12g

Foreign tax identification number, if any

15i

City or town, state or province, country, ZIP or foreign postal code

12h

Address (number and street)

16a

Payer’s name

16b Payer’s TIN

12i City or town, state or province, country, ZIP or foreign postal code

16c

Payer’s GIIN

16d Ch. 3 status code

16e Ch. 4 status code

13a

Recipient’s name

13b Recipient’s country code

17a

State income tax withheld

17b Payer’s state tax no.

17c Name of state

13c Address (number and street)

13d City or town, state or province, country, ZIP or foreign postal code

Form 1042-S (2021)

Explanation of Codes (continued)

10Trust other than Withholding Foreign Trust

11Withholding Foreign Trust

12Qualified Intermediary

13Qualified Securities Lender—Qualified Intermediary

14Qualified Securities Lender—Other

15Corporation

16Individual

17Estate

18Private Foundation

19International Organization

20Tax Exempt Organization (Section 501(c) entities)

21Unknown Recipient

22Artist or Athlete

23Pension

24Foreign Central Bank of Issue

25Nonqualified Intermediary

26Hybrid entity making Treaty Claim

35Qualified Derivatives Dealer

36Foreign Government—Integral Part

37Foreign Government—Controlled Entity Pooled Reporting Codes10

27Withholding Rate Pool—General

28Withholding Rate Pool—Exempt Organization

29PAI Withholding Rate Pool—General

30PAI Withholding Rate Pool—Exempt Organization

31Agency Withholding Rate Pool—General

32Agency Withholding Rate Pool—Exempt Organization

Chapter 4 Status Codes

01U.S. Withholding Agent—FI

02U.S. Withholding Agent—Other

03Territory FI—not treated as U.S. Person

04Territory FI—treated as U.S. Person

05Participating FFI—Other

06Participating FFI—Reporting Model 2 FFI

07Registered Deemed-Compliant FFI—Reporting Model 1 FFI

08Registered Deemed-Compliant FFI—Sponsored Entity

09Registered Deemed-Compliant FFI—Other

10Certified Deemed-Compliant FFI—Other

11Certified Deemed-Compliant FFI—FFI with Low Value Accounts

12Certified Deemed-Compliant FFI—Nonregistering Local Bank

13Certified Deemed-Compliant FFI—Sponsored Entity

14Certified Deemed-Compliant FFI—Investment Entity that does not maintain financial accounts

15Nonparticipating FFI

16Owner-Documented FFI

17U.S. Branch—treated as U.S. person

18U.S. Branch—not treated as U.S. person (reporting under section 1471)

19Passive NFFE identifying Substantial U.S. Owners

20Passive NFFE with no Substantial U.S. Owners

21Publicly Traded NFFE or Affiliate of Publicly Traded NFFE

22Active NFFE

23Individual

24Section 501(c) Entities

25Excepted Territory NFFE

26Excepted NFFE—Other

27Exempt Beneficial Owner

28Entity Wholly Owned by Exempt Beneficial Owners

29Unknown Recipient

30Recalcitrant Account Holder

31Nonreporting IGA FFI

32Direct reporting NFFE

33U.S. reportable account

34Nonconsenting U.S. account

35Sponsored direct reporting NFFE

36Excepted Inter-affiliate FFI

37Undocumented Preexisting Obligation

38U.S. Branch—ECI presumption applied

39Account Holder of Excluded Financial Account11

40Passive NFFE reported by FFI12

41NFFE subject to 1472 withholding

50U.S. Withholding Agent—Foreign branch of FI

Pooled Reporting Codes

42Recalcitrant Pool—No U.S. Indicia

43Recalcitrant Pool—U.S. Indicia

44Recalcitrant Pool—Dormant Account

45Recalcitrant Pool—U.S. Persons

46Recalcitrant Pool—Passive NFFEs

47Nonparticipating FFI Pool

48U.S. Payees Pool

49QI-Recalcitrant Pool—GeneraI13

Box 13j. LOB Code (enter the code that best describes the applicable limitation on benefits (LOB) category that qualifies the taxpayer for the requested treaty benefits).

LOB Code

LOB Treaty Category

02Government – contracting state/political subdivision/local authority

03Tax exempt pension trust/Pension fund

04Tax exempt/Charitable organization

05Publicly traded corporation

06Subsidiary of publicly traded corporation

07Company that meets the ownership and base erosion test

08Company that meets the derivative benefits test

09Company with an item of income that meets the active trade or business test

10Discretionary determination

11Other

10Codes 27 through 32 should only be used by a QI, QSL, WP, or WT. A QI acting as a QDD may use code 27 or 28.

11This code should only be used if income is paid to an account that is excluded from the definition of financial account under Regulations section 1.1471-5(b)(2) or under Annex II of the applicable Model 1 IGA or Model 2 IGA.

12This code should only be used when the withholding agent has received a certification on the FFI withholding statement of a participating FFI or registered deemed- compliant FFI that maintains the account that the FFI has reported the account held by the passive NFFE as a U.S. account (or U.S. reportable account) under its FATCA requirements. The withholding agent must report the name and GIIN of such FFI in boxes 15d and 15e.

13This code should only be used by a withholding agent that is reporting a payment (or portion of a payment) made to a QI with respect to the QI’s recalcitrant account holders.

Form 1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

2021

OMB No. 1545-0096

▶ Go to www.irs.gov/Form1042S for instructions and the latest information.

Copy E

Department of the Treasury

Internal Revenue Service

UNIQUE FORM IDENTIFIER

AMENDED

AMENDMENT NO.

for Withholding Agent

1 Income

2 Gross income

3 Chapter indicator. Enter “3” or “4”

13e Recipient’s U.S. TIN, if any

13f

Ch. 3 status code

code

3a Exemption code

4a Exemption code

13g Ch. 4 status code

3b Tax rate

4b Tax rate

13h Recipient’s GIIN

13i Recipient’s foreign tax identification

13j LOB code

number, if any

5 Withholding allowance

6 Net income

7a Federal tax withheld

13k Recipient’s account number

7b Check if federal tax withheld was not deposited with the IRS because

escrow procedures were applied (see instructions)

13l Recipient’s date of birth (YYYYMMDD)

7c Check if withholding occurred in subsequent year with respect to a

partnership interest

8 Tax withheld by other agents

14a Primary Withholding Agent’s Name (if applicable)

9Overwithheld tax repaid to recipient pursuant to adjustment procedures (see instructions)

11Tax paid by withholding agent (amounts not withheld) (see instructions)

15d Intermediary or flow-through entity’s name

12a

Withholding agent’s EIN

12b Ch. 3 status code

12c Ch. 4 status code

15e

Intermediary or flow-through entity’s GIIN

12d Withholding agent’s name

15f Country code

15g Foreign tax identification number, if any

12e

Withholding agent’s Global Intermediary Identification Number (GIIN)

15h

Address (number and street)

12f

Country code

12g

Foreign tax identification number, if any

15i

City or town, state or province, country, ZIP or foreign postal code

12h

Address (number and street)

16a

Payer’s name

16b Payer’s TIN

12i City or town, state or province, country, ZIP or foreign postal code

16c

Payer’s GIIN

16d Ch. 3 status code

16e Ch. 4 status code

13a

Recipient’s name

13b Recipient’s country code

17a

State income tax withheld

17b Payer’s state tax no.

17c Name of state

13c Address (number and street)

13d City or town, state or province, country, ZIP or foreign postal code

For Privacy Act and Paperwork Reduction Act Notice, see instructions.

Form 1042-S (2021)

⇩ PDF

Fact Name	Description
Purpose	The IRS 1042-S form is used to report income paid to foreign persons, including non-resident aliens and foreign entities. It details the amount paid and any tax withheld.
Filing Requirement	All U.S. withholding agents must file Form 1042-S if they pay amounts to foreign persons that are subject to withholding.
Due Date	The form must be filed with the IRS by March 15 of the year following the payment. Copies of the form must also be provided to recipients by the same date.
State-Specific Forms	Some states may have additional reporting requirements for payments to foreign persons. Check specific state laws for compliance.

After you have gathered all necessary information, filling out the IRS 1042-S form can help ensure that tax obligations are met. This form is specifically designed for reporting payments made to foreign persons or entities. Pay close attention to each section to accurately convey the required information.

Obtain a copy of the IRS 1042-S form. You can download it from the IRS website or request a physical copy.
Identify the correct tax year. Make sure that you are filling out the form for the specific tax year in which the payments were made.
Fill in the recipient's information. This section includes the name, address, and country of residence of the individual or entity receiving the payment.
Provide your information as the withholding agent. This requires your name, address, and the IRS Employer Identification Number (EIN) or Social Security Number (SSN).
Specify the type of income. Indicate what type of payment was made, such as dividends, royalties, or other income types, referring to the instructions provided for guidance.
Enter the amount of income. List the total amount paid to the recipient for the specified tax year.
Indicate the amount withheld. If any taxes were withheld from the payment, include that amount in the appropriate section.
Verify that all information is accurate. Double-check entries to ensure that there are no mistakes that could lead to issues with the IRS.
Submit the form. Once everything is completed and verified, follow the instructions for submission to the IRS, and keep a copy for your records.

What is the IRS 1042-S form?

The IRS 1042-S form is used to report income that is paid to non-resident aliens, foreign partnerships, foreign corporations, and other foreign entities. It is primarily used to report U.S. source income that is subject to withholding tax. This can include various types of income such as interest, dividends, royalties, and compensation for services performed in the U.S.

Who needs to file the 1042-S form?

The responsibility to file the 1042-S form falls on the withholding agent. This can be an individual or an organization that pays income to a non-resident alien. It is essential for them to file this form to report the income paid and the amount of tax withheld. Non-resident recipients of the income may also need to receive a copy of the form for their tax records.

When is the 1042-S form due?

The 1042-S form is generally due on March 15 of the year following the calendar year in which the income was paid. If this date falls on a weekend or a holiday, the due date is extended to the next business day. It's important for withholding agents to stay on top of this deadline to avoid penalties for late filing.

How do I obtain a copy of the 1042-S form?

You can obtain a copy of the 1042-S form through the IRS website or by contacting the IRS directly. Additionally, many tax preparation software programs will also provide the form as part of their services. If you've received income that requires a 1042-S from a U.S. payer, they should provide you with your copy as well.

What information is included on the 1042-S form?

The 1042-S form includes details such as the recipient’s name, address, and taxpayer identification number (TIN), along with the income amount, the type of income, and the amount of U.S. federal tax withheld. This data is vital for both the IRS and the recipient to ensure accurate tax reporting.

Do I need to report the 1042-S income on my tax return?

Yes, if you are a non-resident alien who has received a 1042-S form, you must report that income on your tax return. The income needs to be detailed according to the requirements of your specific tax situation. Even if tax was withheld, reporting it is important for compliance and reconciliation purposes.

What if I don't receive a 1042-S form but I think I should?

If you believe you should have received a 1042-S form but didn't, reach out to the entity that paid you the income. They may have overlooked sending it. It’s also a good idea to keep your records organized, as you may need supporting documents. If they’re unable to provide it, you should still report the income on your tax return.

What penalties are associated with not filing the 1042-S form?

Failure to file the 1042-S form on time may result in penalties. The IRS can impose fines that vary based on how late the form is filed. If the form is filed more than 30 days late but before August 1, the penalty can be reduced, but it’s always better to adhere to deadlines to avoid complications.

Where do I send the 1042-S form?

The IRS provides specific mailing addresses depending on whether you are filing electronically or by mail. If you are filing electronically, you will typically use specific software designed for this purpose. For paper submissions, refer to the IRS instructions for Form 1042-S which will have the correct address based on your location and filing method.

Incorrect Recipient Information: Failing to accurately provide the name, address, and taxpayer identification number (TIN) of the recipient can lead to processing delays.
Wrong Income Codes: Using incorrect income codes for the type of payment made can cause confusion and errors. Make sure to consult the latest IRS guidelines for the proper codes.
Incorrect Tax Rate: Applying the wrong tax rate or failing to withhold taxes properly may result in penalties. Always verify the applicable tax rates for different countries.
Missing Signatures: Leaving out the required signatures on the form can invalidate it. Ensure that all necessary signatures are included before submission.
Not Submitting on Time: Failing to file the form by the deadline can lead to penalties. Mark your calendar and allow time for any unforeseen delays.
Using Outdated Forms: Always check if you are using the most current version of the 1042-S form. IRS updates forms regularly, and outdated versions may not be accepted.

The IRS 1042-S form is primarily used for reporting income that is subject to withholding tax for non-resident aliens and foreign entities. However, several other documents often accompany this form to ensure proper compliance, accuracy, and transparency in reporting income and withholding. Here are some of those documents:

Form W-8BEN: This form is used by foreign individuals to certify their foreign status and claim a reduced rate of withholding tax according to applicable tax treaties.
Form W-8BEN-E: Similar to W-8BEN, this form is for foreign entities. It helps entities claim tax treaty benefits and verify their foreign status.
Form 1042: This is an annual summary report for all withheld amounts from payments made to non-residents. It consolidates information from individual 1042-S forms.
Form 8804: This form is used by partnerships to report and pay withholding taxes on effectively connected income allocated to foreign partners.
Form 8805: This form provides a record of withholding on distributions to foreign partners, indicating the amount withheld and allocated to each partner.
Form 1042-T: This form is a transmittal form used to submit multiple 1042-S forms to the IRS, summarizing the data reported on those forms.
Form 4868: While not directly related, this form is used to request an extension on filing individual tax returns, which may be relevant for those dealing with withholding taxes.

Understanding these forms and their purposes can significantly aid in the compliance process for those dealing with non-resident alien income. Maintaining accuracy and transparency in documentation is essential for avoiding potential penalties and ensuring smooth interactions with the IRS.

The IRS Form W-2 is similar to the 1042-S as both are used to report income to the IRS, but they serve different populations. The W-2 is issued by employers to report an employee’s annual wages and the taxes withheld. Conversely, the 1042-S is used for reporting income earned by non-resident aliens, including payments for services, scholarships, and certain other income types. While both forms are essential for tax commitments, the target audience and income categories differ significantly.

IRS Form 1099 is another document comparable to the 1042-S. The 1099 series is utilized for reporting various types of income other than wages, salaries, and tips, including freelance income, interest, and dividends. While issued to U.S. citizens and residents, it shares similarities with the 1042-S in that both forms are designed to detail income that may be subject to tax withholding. Like the 1042-S, the 1099 also requires careful reporting to the IRS to ensure compliance and avoid tax issues.

Form 1098 has its similarities with the 1042-S as it is used to report specific types of financial transactions—primarily interest payments on student loans or mortgage interest. Both forms serve as tools for tax reporting, providing necessary financial information to the IRS. However, while 1098 might be more focused on interest payments for U.S. taxpayers, the 1042-S addresses income for a broader range of non-resident payments, showcasing the diversity in tax reporting requirements.

Finally, IRS Form 1040NR is relevant in this context. It is specifically designed for non-resident aliens, similar to how the 1042-S reports income generated by those individuals. Form 1040NR is used to file annual income tax returns by non-residents, providing an overview of income and possible deductions. The 1042-S complements this form by detailing specific income sources throughout the year, allowing the IRS and the taxpayer to have a clearer picture of taxable income and obligations.

When filling out the IRS 1042-S form, it’s crucial to pay attention to details. Here’s a list of essential do's and don'ts to help you complete the form accurately.

Do ensure you have the correct recipient information, including name and address.
Do double-check taxpayer identification numbers (TINs) for accuracy.
Do report the correct income type and amount received.
Do use the proper tax rate according to tax treaties, if applicable.
Don't skip instructions provided by the IRS for completing the form.
Don't assume pre-filled information is correct. Always verify.
Don't forget to sign and date the form if required.
Don't procrastinate. Submit the form by the deadline to avoid penalties.

Following these guidelines can help ensure that the IRS 1042-S form is filled out correctly and submitted on time. Take the time necessary to review your entries and confirm details before submission.

The IRS 1042-S form is often misunderstood. Here are ten common misconceptions about this important document:

It's only for foreign students. Many believe the form is exclusively for foreign students, but it also applies to other non-resident aliens receiving income from U.S. sources.
Payments reported on 1042-S are always taxable. Not all payments reported on this form are taxable. Some income may be exempt under tax treaties.
Only the payor needs to file it. While the entity making the payment files the 1042-S, the recipient must also report the income on their tax return.
Receiving a 1042-S means you owe taxes. Receiving this form does not automatically mean taxes are owed. It depends on individual circumstances and potential treaty benefits.
It's the same as a W-2. The 1042-S and W-2 serve different purposes. The W-2 is for U.S. citizens and residents, while the 1042-S is for non-residents.
The IRS does not care about missed deadlines. Timely filing is crucial. Missing deadlines can lead to penalties for both the payor and the recipient.
Only large amounts are reported. Any amount of income that fits the criteria must be reported, regardless of its size.
All income is reported in the same way. Different types of income, such as royalties or scholarships, may have different reporting requirements.
You can't appeal incorrect entries. If there is an error, recipients can contact the payor for corrections and follow the IRS procedures for addressing disputes.
Filing the 1042-S is optional. Filing this form is mandatory for certain payments made to foreign persons. It ensures compliance with U.S. tax law.

Understanding these misconceptions can help ensure compliance and smooth handling of tax matters related to the IRS 1042-S form.

14b Primary Withholding Agent’s EIN

15 Check if pro-rata basis reporting

14b Primary Withholding Agent’s EIN

10 Total withholding credit (combine boxes 7a, 8, and 9)

10 Total withholding credit (combine boxes 7a, 8, and 9)

15a Intermediary or flow-through entity’s EIN, if any 15b Ch. 3 status code 15c Ch. 4 status code

The IRS 1042-S form is important for reporting payments to non-resident aliens and foreign entities. Here are four key takeaways to keep in mind when filling out and using this form:

Understand the Purpose: The 1042-S form reports income such as wages, interest, or dividends paid to non-residents. It's crucial for ensuring compliance with U.S. tax laws.
Filing Deadline: Ensure that the form is filed by March 15th of the year following the payment. Late filing may result in penalties and complications.
Provide Accurate Information: Double-check all details such as the recipient’s information and payment amounts. Errors can lead to tax issues for both the payer and the recipient.
Recipient Copies: Remember that the recipient must receive their copy of the 1042-S form by March 15th. This is vital for them to report their income accurately in their home country.