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The IRS 1042-S form is a tax document used by the United States Internal Revenue Service to report certain types of income paid to foreign individuals and entities. Designed with the intent of capturing information on payments that may not involve work, such as dividends, interest, and rent, this form plays a crucial role in the enforcement of U.S. tax laws on international transactions. It serves as a means for the government to ensure appropriate taxation of foreign income, facilitating compliance with international tax obligations.

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Outline

The labyrinth of tax forms in the United States includes some that are more cryptic than others, and nestled among them is the IRS 1042-S form. This document plays a pivotal role in the financial interactions between the U.S. and persons or entities beyond its borders. It serves as a critical mechanism for reporting income paid to foreign individuals, whether they are students, employees, or contractors, and on investments held by non-U.S. residents. The form captures a wide array of income types, from scholarships and royalties to interest and dividends, essentially any payment that could be subject to U.S. income tax withholding. Moreover, the 1042-S form is not just about reporting amounts paid; it also details the taxes withheld on these payments, ensuring compliance with tax treaties and U.S. tax laws. This information provides the Internal Revenue Service (IRS) with the means to ensure that the appropriate taxes are collected, and it gives foreign individuals and entities the data needed to navigate their tax obligations within their own countries, perhaps claiming a credit for taxes paid in the U.S. Given its multifaceted purposes and the complexities that can arise in cross-border taxation scenarios, understanding the intricacies of the 1042-S form is paramount for those navigating the international aspects of U.S. tax law.

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

2022

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 (2022)

Form 1042-S

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

2022

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 (2022)

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.

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

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.

	34	Substitute payment—dividends
	40	Other dividend equivalents under IRC section 871(m)
Dividend	52	Dividends paid on certain actively traded or publicly offered
Dividend		securities1
		securities1
	53	Substitute payments-dividends from certain actively traded or
		publicly offered securities1
	56	Dividend equivalents under IRC section 871(m) as a result of
		applying the combined transaction rules

	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

2022

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 (2022)

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

57Amount realized under IRC section 1446(f)

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 or Publicly Traded 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

2022

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 (2022)

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

38Publicly Traded Partnership

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

12No LOB article in treaty

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

2022

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 (2022)

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Fact Name	Description
Form Purpose	The IRS Form 1042-S is used to report income paid to a non-resident of the United States that is subject to income tax withholding.
Who Files It	This form is typically filed by a U.S. or foreign payer who pays a foreign person that includes individuals, corporations, partnerships, trusts, estates, consortia, or any other entity.
Types of Income Reported	Form 1042-S covers various types of income such as salaries, scholarships, dividends, royalties, rentals, commissions, and any other compensation or income paid to a non-resident alien.
Reporting and Withholding Compliance	The form helps ensure compliance with the withholding tax requirements under chapters 3 and 4 of the Internal Revenue Code, helping institutions to report amounts paid, taxes withheld, and to ensure the proper taxation of non-resident aliens.

Filing the IRS 1042-S form is a crucial step for entities making payments of certain U.S. source income to foreign persons, including individuals, corporations, partnerships, trusts, estates, or any foreign persons that are subject to U.S. tax withholding. It requires precision and attention to detail. To ensure compliance with the IRS requirements, follow these step-by-step instructions to accurately complete and submit the form. Remember, this process helps in maintaining the integrity of the financial system while adhering to the tax laws in place for foreign entities and individuals.

Start by gathering all necessary documentation, including the taxpayer identification number (TIN) of the recipient, the amount of income paid, and any tax withheld.
Enter the recipient's information accurately in the relevant sections. This includes the recipient's name, country of citizenship, address, and the TIN.
Specify the type of income paid to the recipient in the designated area of the form. This requires identifying the correct income code from the IRS code list.
Record the gross amount of income paid during the tax year in U.S. dollars, converting from foreign currency if necessary using the IRS-approved exchange rate.
Enter the total tax withheld or the rate of withholding as applicable. It’s crucial to ensure this amount aligns with U.S. tax treaties and the recipient's tax status.
For those using electronic filing, ensure all digital signatures and encryption requirements are met. This step is integral to the verification and security of the information submitted.
Review the filled form for accuracy and completeness. Double-check all entered information, including calculations, to ensure there are no errors.
Submit the form to the IRS by the required deadline. Pay attention to the submission dates to avoid penalties for late filing. These dates can vary annually, so it's important to confirm the current year's deadline.

After submission, keep a copy of the 1042-S form and any supporting documentation for your records. This provides evidence of compliance with IRS regulations and can be invaluable in the event of queries or audits. Staying organized and maintaining clear records simplifies future tax filings and supports accurate reporting for both the entity and the recipient.

What is an IRS 1042-S form and who needs to file it?

The IRS 1042-S form, formally known as the Foreign Person's U.S. Source Income Subject to Withholding, is a tax document used to report amounts paid to foreign persons (including individuals, corporations, partnerships, or non-resident alien individuals) by United States-based entities. This form is critical for income types such as dividends, interest, royalties, and compensation for services performed in the U.S., among others, when these amounts are subject to income tax withholding. Academic institutions, investment entities, and businesses that engage with foreign contractors or partners often find themselves required to file this form.
What types of income are reported on the 1042-S form?

Income reported on the 1042-S form spans various categories, reflecting the diverse nature of payments that U.S. sources might make to foreign entities. Key categories include, but are not limited to, earned income, such as wages or compensation for services; passive income, such as interest, dividends, and royalties; and gambling winnings. Each type of income necessitates careful documentation and accurate reporting to ensure compliance with U.S. tax laws and treaty agreements.
When is the deadline to file the 1042-S form?

The IRS mandates that the 1042-S form be filed by March 15th following the close of the calendar year in which the income was paid to the foreign person. Filers should be aware of this deadline to avoid penalties associated with late submissions. For those requiring more time, the IRS does offer an extension to file the form; however, an official request must be submitted to obtain this extension.
How does one obtain an extension to file the 1042-S form?

To secure an extension for filing the 1042-S form, the filer must submit a formal request to the IRS before the original due date of March 15th. This involves filing Form 8809, Application for Extension of Time to File Information Returns. It is important to note that this extension will grant additional time to file the form, not an extension to pay any due taxes. Accurate estimation and payment of taxes are expected by the original due date to avoid penalties.
Are there penalties for failing to file the 1042-S form?

Yes, failure to file the 1042-S form can result in significant penalties. These penalties are tiered based on the delay in filing. The initial penalty is imposed if the form is not filed by the due date (including extensions), with additional charges accruing the longer the form remains unfiled. These penalties underscore the importance of timely and accurate filing, not only to remain compliant with U.S. tax regulations but also to avoid needless financial costs.

Filling out the IRS 1042-S form can often feel like navigating through a maze. Mistakes are easy to make but can lead to headaches down the road. Here are four common missteps:

Not reporting all relevant sources of income. It might be tempting to include only your primary sources of income, but every payment that falls under the scope of the 1042-S form must be reported. This includes, but is not limited to, scholarships, grants, and compensation for services.
Using incorrect recipient codes. Each type of income and recipient has a specific code, and using the wrong one can throw a wrench into the processing of your form. Always double-check these codes to ensure they match the nature of your income and your status.
Forgetting to include complete payer information. The entity or person paying the income must be fully identified on the form. This means providing not just a name, but also a complete address and tax identification number. Incomplete information may cause delays or result in the form being sent back for correction.
Misunderstanding tax treaty benefits. If a tax treaty between the United States and your home country applies to you, understanding the specifics is crucial. Incorrectly applied benefits can lead to underpayment or overpayment of taxes, each with its own set of complications.

Keeping these points in mind will help smooth the filing process, ensuring accuracy and timeliness in your dealings with the IRS.

When dealing with tax reporting and compliance in the United States, especially in regards to payments made to foreign persons, the IRS Form 1042-S plays a crucial role. Beyond this form, several other documents and forms often play supportive or complementary roles in ensuring thorough compliance and reporting. These documents vary in purpose, from declaring tax treaty benefits to reporting income not subject to withholding. Whether you're an individual navigating the complexities of U.S. tax law for the first time, or a seasoned professional looking for a refresher, understanding these forms can provide clarity and ensure you meet all necessary tax obligations.

W-8BEN: This form is essential for non-U.S. individuals to claim tax treaty benefits and to prove that they are not U.S. persons. It helps reduce the withholding tax rate on payments received from U.S. sources.
W-8BEN-E: Similar to the W-8BEN, this form is used by entities rather than individuals. It's critical for foreign entities looking to claim special tax treaty benefits or to certify their status for withholding purposes.
1042: This is the annual withholding tax return for U.S. source income of foreign persons. It summarizes the total withholding and income reported on all 1042-S forms issued by the payer.
Form 8804: Used to report and pay withholding tax on income effectively connected with a U.S. trade or business allocated to foreign partners.
Form 8805: This document is provided to foreign partners to report income effectively connected with a U.S. trade or business, enabling them to file their U.S. tax returns and claim credits for their share of the withholding tax reported.
W-9: Request for Taxpayer Identification Number and Certification, is used by U.S. persons to provide their tax identification number to entities that pay them income. Though not exclusively related to 1042-S filings, it's often part of the documentary context within which payments to foreign persons are made.
Form 8233: Nonresident aliens who are eligible for tax treaty exemptions on compensation for personal services performed in the U.S. use this form. It exempts part or all of their income from withholding.
Form 1099: Various 1099 forms are used to report different types of income to U.S. persons. They are relevant to the context because they are often used in conjunction to the 1042 and 1042-S forms when dealing with mixed-status entities or individuals receiving both U.S. and foreign source income.
Form 8966: This form is part of the Foreign Account Tax Compliance Act (FATCA) reporting and is used by foreign financial institutions to report financial accounts held by U.S. taxpayers or foreign entities with substantial U.S. owners.
SS-4: Application for Employer Identification Number (EIN), used by entities, including foreign entities, to apply for an EIN. This number is often required to complete other forms listed, including the 1042-S.

Understanding and properly utilizing these forms can significantly ease the process of compliance with U.S. tax laws. Entities and individuals engaged in cross-border payments should ensure they are familiar with the requirements of each relevant form to avoid penalties and maximize their benefit under the law. Consulting with a tax professional can provide personalized guidance and additional assurance that one's tax affairs are handled correctly.

The W-2 Form is similar to the IRS 1042-S form in that it reports income. While the 1042-S is for foreign persons' U.S. source income subject to withholding, the W-2 is used for reporting wages, tips, and other compensation paid to an employee and the taxes withheld from them in the U.S.
The 1099 Series of forms, especially the 1099-MISC and 1099-NEC, show similarities as they are used to report various types of income other than wages, salaries, and tips. These forms cater to U.S. citizens and residents, unlike the 1042-S which is specifically for the reporting of non-U.S. persons’ income.
The W-8BEN Form relates closely to the IRS 1042-S because it is also tied to foreign individuals. However, the W-8BEN is used by the individuals to certify their foreign status and claim benefits under the income tax treaty, rather than report income.
W-9 Form draws a parallel by being a request for taxpayer identification number and certification. Unlike the 1042-S which reports income paid to foreign persons, the W-9 is utilized to provide information directly by U.S. persons or resident aliens usually for real estate transactions, or other scenarios not involving employment.
The 1040 Form, used by individuals to file annual income tax returns in the U.S., shares similarities with the 1042-S as both deal with the reporting of income and taxes. However, the 1040 is much broader, covering all types of income earned by U.S. taxpayers.
Form 8966, the FATCA Report, is akin to the 1042-S as it deals with foreign financial information. The 8966 is part of the U.S. Foreign Account Tax Compliance Act (FATCA), requiring foreign financial institutions (FFIs) and certain other non-financial foreign entities to report on the foreign assets held by U.S. account holders.
Form 8804/8805/8813, related to Partnership Withholding Tax, have connections as they involve non-U.S. partners. These forms are used to report and pay the withholding tax due on effectively connected income allocable to the foreign partners, similar to how the 1042-S is used to report income paid to foreign individuals.

The IRS 1042-S form, also known as the Foreign Person's U.S. Source Income Subject to Withholding form, is an essential document for reporting amounts paid to foreign persons, including non-resident aliens, foreign corporations, and international organizations. Properly filling out this form is critical to ensure compliance with U.S. tax laws. Below are key dos and don'ts to consider when completing the IRS 1042-S form:

Do:

Review the instructions provided by the IRS for the 1042-S form to understand the requirements and definitions. This will help in accurately reporting the necessary information.
Double-check the recipient’s information, such as their name, address, and Tax Identification Number (TIN), to ensure accuracy. Mistakes can lead to processing delays or incorrect tax withholdings.
Use the correct income and tax withholding codes for the type of income being reported. Each type of income has specific codes that need to be used to classify the income correctly.
Report the income in U.S. dollars (USD), converting foreign currency into USD using the exchange rate in effect on the date of payment, unless indicated otherwise in the IRS instructions.
Retain a copy of the completed form for your records. It is essential to keep a copy for at least three years from the date of filing or the date the taxes were paid, whichever is later, in case of queries or audits from the IRS.

Don't:

Leave fields blank that are required. If a particular field does not apply, enter "N/A" (not applicable) or "0" if the instructions permit, instead of leaving it blank.
Misclassify the recipient. Make sure to select the correct recipient status, whether it's an individual, corporation, or government entity, as this affects how the income is taxed.
Forget to sign and date the form if submitting a paper copy. An unsigned form can be considered invalid, leading to delays in processing.
Assume one form fits all situations. Depending on the circumstances, multiple forms 1042-S may need to be filed for different income types or recipients. Consult the IRS instructions to determine if more than one form is necessary.
Disregard state filing requirements. Some states may require a copy of the 1042-S form to be filed with the state tax department. Check the relevant state's filing requirements to ensure compliance.

When dealing with the IRS 1042-S form, many people have misconceptions. This form is pivotal for reporting income paid to a non-resident, including wages, scholarships, and compensation for services. Let's debunk some common misunderstandings about it.

Only applicable to employment income: A common myth is that Form 1042-S is only for reporting wages paid to non-resident aliens. In truth, it covers a broader range of payments including scholarships, grants, and royalties.
Only for large businesses: Some believe that only large corporations need to file Form 1042-S. However, any entity making payments subject to reporting to non-residents, regardless of its size, must file this form.
Identical to Form 1099: People sometimes confuse Form 1042-S with Form 1099. While both forms report income, Form 1042-S is specifically for payments made to non-residents, whereas Form 1099 is used for payments made to U.S. residents and citizens.
Filing is optional if tax was withheld: There's a misconception that if tax is withheld at the source, filing Form 1042-S is not necessary. This is incorrect. Even if tax is withheld, filing the form is still required to report the payments and withholding accurately.
Filing deadline is the same as personal tax returns: Many confuse the filing deadline for Form 1042-S with that of personal tax returns. Actually, the deadline for Form 1042-S is March 15, which is earlier than the April 15 deadline for personal tax returns.
Electronic filing is not allowed: Some are under the impression that Form 1042-S cannot be filed electronically. On the contrary, electronic filing is encouraged, and entities filing 250 or more forms must file them electronically.
Amendments cannot be made after submission: A common myth is that once Form 1042-S is submitted, it cannot be amended. In reality, amendments are allowed and should be made as soon as errors are discovered to ensure accurate reporting.
Only accounts for income in the U.S.: There's a misconception that Form 1042-S only reports income from within the United States. It actually reports payments made to non-residents, regardless of where the services were performed, as long as they are subject to U.S. tax regulations.
Recipients do not need a copy: Lastly, some believe that the recipient of the income does not need a copy of Form 1042-S. However, the recipient needs this form to accurately complete their tax return, similar to how U.S. residents use Form 1099.

The IRS 1042-S form is an important document for reporting amounts paid to foreign persons, including employees, independent contractors, and other types of foreign entities. Understanding how to properly fill out and use this form is crucial for compliance with U.S. tax laws. Here are five key takeaways to guide you through the process:

Identify the Recipient Correctly: It's important to accurately identify the recipient of the income. This includes their name, address, and tax identification number (TIN), if applicable. Providing precise information helps prevent processing delays or errors.
Determine the Type of Income: The 1042-S form covers various types of income, from wages and scholarships to royalties and gambling winnings. Identifying the type of income correctly is crucial for applying the appropriate tax withholding and reporting rates.
Understand Tax Treaty Benefits: Many foreign recipients are eligible for reduced withholding rates under tax treaties between their country and the U.S. Check if a treaty applies and ensure to document this on the form, as it can significantly affect the amount withheld.
Accurate Withholding and Reporting: Withholding the correct amount of tax is critical. This requires understanding the applicable tax rate for the type of payment and the recipient's eligibility for any exemptions. Be precise in calculating and reporting the withheld amount to avoid under- or over-withholding.
Timely Filing: Adhering to the filing deadlines for the 1042-S form is essential. Late filing can result in penalties and interest charges. Ensure all information is accurate and submitted by the deadline to avoid unnecessary complications.

By keeping these key points in mind, one can navigate the complexities of the 1042-S form more effectively, ensuring compliance with U.S. tax obligations while maintaining good standing in international payment processes.

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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

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