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The IRS 1042-S form serves as a vital document used to report income earned by foreign individuals or entities that is subject to U.S. tax withholding. This form allows payers to disclose payments made to non-resident aliens and foreign entities while detailing any tax withheld. Understanding how to accurately complete this form is essential for compliance with IRS regulations.

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The IRS 1042-S form plays a crucial role in the reporting of income paid to non-resident aliens and foreign entities within the United States. This form is particularly significant for various income types, including scholarships, grants, and certain payments made to foreign individuals. Both payers and recipients must adhere to specific regulations when utilizing the 1042-S to ensure compliance with U.S. tax laws. It is vital for those engaged in international transactions or who are involved with foreign individuals to understand the requirements associated with the form. The 1042-S not only outlines the amount of income paid and the applicable tax withheld but also serves as a means for the IRS to track different types of income across natinal borders. Accordingly, accurate completion of this form is essential for mitigating potential penalties and ensuring that correct withholding practices are observed. By understanding these fundamental aspects, individuals and organizations can navigate the complexities of international taxation more effectively.

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)

Click for IRS 1042-S File

Fact Name	Details
Purpose	The IRS 1042-S form is used to report income paid to foreign persons, including non-resident aliens and foreign entities.
Filing Deadline	The form must be filed by March 15 of the year following the payment, and recipients should receive their copies by that date as well.
Income Types	Common income types reported on the 1042-S include dividends, interest, royalties, and other payments to foreign individuals and entities.
Withholding Tax	The form summarizes withholding tax obligations on payments made to foreign recipients. It shows the total income paid and the amount withheld.
Governing Laws	The IRS 1042-S is governed by Internal Revenue Code Sections 1441 and 1442, which outline the tax withholding requirements for foreign persons.
Special Considerations	Foreign recipients may need to provide tax identification numbers or forms (like W-8BEN) to claim benefits like reduced withholding tax rates under tax treaties.

To fill out the IRS 1042-S form, follow these steps carefully. Accurate completion of this form is important for reporting certain types of income to the Internal Revenue Service. Once filled out, you will need to submit the form to both the IRS and the recipient of the income.

Obtain the IRS 1042-S form. You can download it from the IRS website or acquire a physical copy through your tax professional.
Fill in the filer's information. This includes the name, address, and taxpayer identification number of the entity that is paying the income.
Enter the recipient's information. Provide the name, address, and taxpayer identification number of the person or entity receiving the income.
Indicate the income type. Choose the right code from the list provided on the form to categorize the income being reported.
State the amount of income paid. Enter the total dollar amount of the income that is being reported.
Complete the withholding tax section if applicable. Report any tax that was withheld from the income before payment was made to the recipient.
Sign and date the form. This confirms accuracy and verifies the information provided.
Make a copy of the completed form for your records.
Send the completed form to the IRS by the required deadline, as well as to the income recipient.

After completing the form, ensure all information is accurate before submission. Double-check details to avoid any potential issues with processing by the IRS. Keep a copy on hand for your records, as you may need to reference it in the future.

The IRS 1042-S form is used to report income that is subject to withholding for non-resident aliens. This may include various types of income such as interest, dividends, and royalties. If you received payments from a U.S. source and you are not a U.S. citizen or resident, you might receive this form. The form is typically issued by the withholding agent, which could be a financial institution or a business that made the payment.

Typically, the 1042-S form needs to be filed by any entity that pays income to a non-resident alien. This includes U.S. businesses, universities, and individuals. If you are a non-resident alien who received income from U.S. sources, you should also keep an eye out for this form, as it provides essential details for your tax filing obligations.

The 1042-S form must be issued by March 15 of the year following the calendar year in which the income was paid. For example, if you received income in 2023, the form should be provided to you by March 15, 2024. Timely issuance is crucial as it helps non-resident aliens accurately report their income when filing taxes.

When reporting income from the 1042-S form, you will generally need to include the income amount listed on the form when filing your tax return. Non-resident aliens file Form 1040-NR, the U.S. Nonresident Alien Income Tax Return. Furthermore, you'll need to ensure that you've accounted for any taxes withheld, which should also be noted on the 1042-S.

If you believe you should have received a 1042-S form but did not, it's important to take action. First, contact the entity from which you received the income, as they might have issued it but failed to deliver it. If they're unresponsive, consider keeping thorough records of your income and any tax withheld. You may still need to report this income on your tax return, so consult with a tax professional if you're uncertain about your obligations.

If you notice inaccuracies on your 1042-S form, reach out directly to the withholding agent that issued it. They are responsible for correcting any mistakes. Ensure you have supporting documentation to prove the correct information. If the agent issues a corrected form, retain both the original and the corrected documents, as you may need them for your tax filing.

Filling out tax forms can be a daunting task, and the IRS 1042-S form is no exception. This form reports income that is subject to withholding for non-resident aliens. Yet, many people make mistakes that can lead to complications or delays in processing. One common mistake is failing to provide accurate taxpayer identification information. Correct identification numbers are crucial; without them, the IRS may reject the form, causing unnecessary headaches.

Another frequent error involves incorrect income reporting. Sometimes individuals misclassify the type of income they receive, which can affect how much tax is owed. For instance, failing to distinguish between "effectively connected income" and "fixed or determinable annual or periodic (FDAP) income" can lead to wrong withholding amounts. Understanding these terms is important for accurate reporting.

Moreover, many people overlook the requirement to check the correct boxes on the form. Each box corresponds to specific circumstances and types of income, so selecting the wrong option can complicate one's tax situation. This may result in significant tax liabilities or penalties down the road.

Furthermore, the importance of accurate currency reporting cannot be overstated. People sometimes forget to convert income amounts into U.S. dollars, leading to miscalculations and confusion. The IRS expects amounts to be reported in a consistent currency, so this step is essential to prevent errors.

In addition, the form needs to be filed by the deadline, which catches some individuals off guard. Missing the deadline can incur penalties or additional interest on any tax owed. Staying mindful of filing dates helps avoid these consequences.

Lastly, documentation is key. Many individuals fail to keep copies of their filled-out forms and the supporting documents. This can create problems if there are discrepancies or if the IRS requests additional information. Maintaining thorough records ensures that one can address issues that may arise later.

The IRS 1042-S form is used by withholding agents to report income paid to foreign persons. This form is often accompanied by other documents that help clarify or provide additional information related to these reporting requirements. Below is a list of other forms and documents commonly associated with the IRS 1042-S.

W-8BEN Form: This form certifies that the foreign individual or entity is not a U.S. taxpayer. It is used to establish a claim for a reduced rate of withholding tax under an applicable tax treaty.
W-8ECI Form: This form is for foreign persons receiving income that is effectively connected with a trade or business in the United States. It exempts them from withholding on that income.
W-8IMY Form: This is used for intermediaries, including foreign partnerships and trusts, to certify their status and provide documentation required for withholding purposes.
Form 1042: This annual report summarizes all amounts withheld under U.S. tax law for foreign persons. It reconciles the amounts reported on multiple 1042-S forms.
Form 1042-T: This form provides annual summaries of the 1042-S forms sent to recipients for a specific tax year, categorizing them by recipient and type of income.
Form 8804: This form is for partnerships to report taxes withheld from foreign partners. It is used in conjunction with 1042-S for accurate reporting of tax responsibilities.

Understanding these forms can ensure compliance with U.S. tax requirements for foreign individuals and entities. Maintaining accurate records and properly filing these documents is essential for all parties involved.

IRS Form W-2: This form is used to report wages and taxes withheld for employees. Similar to the 1042-S, it provides information about income and withholding, but it focuses on domestic employees rather than foreign individuals.
IRS Form 1099-MISC: This form reports various types of income received by non-employees, like independent contractors. Like the 1042-S, it is used to report non-employee income, but pertains to domestic payments rather than payments to foreign entities.
IRS Form 1099-DIV: Used to report dividends and distributions to shareholders, this form is similar in that it provides information on payments made, yet it specifically focuses on dividends rather than the more general foreign income reported on the 1042-S.
IRS Form 1099-INT: This form reports interest income earned by individuals. Like the 1042-S, it documents income; however, it is specific to interest payments rather than all types of income made to foreign recipients.
IRS Form 1099-R: This form deals with distributions from retirement accounts. While it is used to report income, it centers on retirement distributions rather than international tax treaties and withholding, which are covered by the 1042-S.
IRS Form 8966: This form is used to report certain information regarding foreign financial accounts and entities under the Foreign Account Tax Compliance Act (FATCA). Similar to the 1042-S, it involves foreign entities but focuses on compliance rather than income reporting.
IRS Form 1042: This form serves as an annual summary of payments subject to withholding for foreign persons. It complements the 1042-S by summarizing all the information reported over the year, making it similar in purpose but distinct in its focus on totals instead of individual payments.
IRS Form 1040-NR: Non-resident aliens use this form to report income and claim any applicable tax treaty benefits. Like the 1042-S, it acknowledges foreign status but is an individual income tax return rather than a reporting form for the remitting organization.

When filling out the IRS 1042-S form, it's important to follow specific guidelines to ensure accuracy and compliance. Here are some key do's and don'ts to keep in mind:

Do: Double-check all information for accuracy, including names, addresses, and identification numbers.
Do: Use the correct form version and ensure you’re filling in the appropriate fields for your recipient.
Do: File the form on time; late submissions can lead to penalties.
Do: Keep copies of all submitted forms for your records, as they may be needed for future reference.
Do: Review IRS guidelines thoroughly to understand any specific tax treaties that may apply to your situation.
Don't: Overlook common errors, such as transposing numbers in identification details.
Don't: Ignore the instructions regarding currency conversion if payments are made in foreign currency; this is crucial for accurate reporting.

By adhering to these guidelines, you can simplify the process and avoid complications that might arise from mistakes. Properly completing the IRS 1042-S ensures that all parties remain compliant and informed.

The IRS 1042-S form is often misunderstood. Here are eight common misconceptions:

Only non-residents need to file the 1042-S.
While primarily used by non-residents, certain U.S. citizens may also receive this form in specific situations involving foreign income.
The 1042-S form is only for income derived from investments.
This form can report various types of income, including wages and scholarships that qualify as payment to non-residents.
All payments reported on the 1042-S are taxed at a flat rate.
Tax rates can vary based on tax treaties between the U.S. and other countries, leading to different effective rates for recipients.
Receiving a 1042-S means you owe taxes.
This form indicates income received but does not necessarily mean taxes are due. A recipient’s specific tax situation will dictate that outcome.
Only foreign financial institutions use the 1042-S.
Many types of U.S. businesses and educational institutions may also issue the 1042-S if they make payments to foreign persons.
Filing the 1042-S is optional.
For those required to report income subject to IRS withholding, filing this form is mandatory to comply with U.S. tax laws.
The 1042-S form is the same as the W-2 form.
While both are used for reporting income, the 1042-S is specifically for non-residents and involves different income types and tax implications.
Once you receive a 1042-S, you can ignore it if you don’t owe taxes.
It’s essential to keep this document for your records and to accurately report your income on your tax return, regardless of tax liability.

Understanding these misconceptions can help ensure compliance with tax responsibilities and better navigate the complexities associated with the 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 an important document for reporting certain payments made to non-resident aliens and foreign entities. Here are key takeaways to keep in mind when filling it out and using it:

Understanding the Purpose: The 1042-S form is primarily used to report income and withholding for non-residents. It covers payments such as interest, dividends, and royalties.
Who Should File: Any U.S. withholding agent, including individuals, partnerships, and corporations, must file a 1042-S if they make payments to foreign persons.
Accurate Recipient Information: Ensure that names, addresses, and taxpayer identification numbers of recipients are precise. Errors can lead to delays or penalties.
Filing Deadlines: The 1042-S form must be filed by March 15 of the year following the payment. Ensure you meet this deadline to avoid consequences.
Withholding Requirement: It’s crucial to apply the correct withholding tax rates based on the type of income and any applicable tax treaties.
Providing Copies: After completing the form, send copies to both the recipient and the IRS. This ensures compliance and transparency.
Record-Keeping: Maintain accurate records of all payments reported on the 1042-S. This documentation will be vital for future audits or inquiries.
Seek Professional Guidance: Given the complexities involved, consider consulting a tax professional familiar with international tax laws and compliance requirements.

By understanding these key aspects, individuals and organizations can navigate the process of filling out and using the IRS 1042-S form more effectively.