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The IRS 1042-S form is an important tax document used for reporting income paid to a foreign person, including individuals, corporations, partnerships, or estates, within the United States. This form covers various types of income, from dividends and royalties to scholarships and fellowship grants. Its primary purpose is to ensure compliance with the tax reporting and withholding obligations on U.S. source income paid to non-residents.

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Navigating the complexities of tax documentation is essential for individuals and organizations involved in international financial transactions. Among the various forms the Internal Revenue Service (IRS) mandates, the IRS 1042-S form stands out due to its specific purpose and the audience it serves. Primarily, it is designed for foreigners who receive certain types of income from U.S. sources, which could range from salaries and wages to scholarships and fellowship grants. This form plays a pivotal role in ensuring compliance with the tax withholding and reporting requirements set by the U.S. tax authorities. It provides a detailed account of the income paid to these individuals and any taxes withheld from their payments. By accurately filling out and submitting the IRS 1042-S form, both the payers and the recipients can navigate the tax landscape more effectively, avoiding potential penalties while ensuring that the correct tax amounts are reported and paid. Understanding the nuances of this form is crucial for anyone involved in managing or receiving international payments subject to U.S. taxation.

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)

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Fact Name	Description
Form Purpose	The IRS 1042-S form is used to report income paid to foreign persons including non-resident aliens, foreign partnerships, foreign corporations, foreign estates, and foreign trusts.
Income Types	This form covers various types of income, such as interest, dividends, rents, royalties, and scholarship or fellowship grants.
Withholding Requirements	Form 1042-S is used to report amounts paid that are subject to withholding under Chapter 3 of the Internal Revenue Code, which pertains to U.S. source income of foreign persons.
Tax Treaties	The form can reflect the application of reduced rates of withholding at source as facilitated by income tax treaties between the U.S. and foreign countries.
Filing Entity	U.S. withholding agents, such as individuals, businesses, or institutions, that pay income to foreign persons must file Form 1042-S.
Deadlines	Form 1042-S must be filed with the IRS and furnished to the recipient by March 15 following the calendar year in which the income was paid.
Electronic Filing	Filers who must submit 250 or more Forms 1042-S must file them electronically through the IRS FIRE (Filing Electronic Returns Electronically) system.
Penalties	Failure to file or incorrect filing of Form 1042-S can result in penalties, which may include fines and interest on unpaid taxes.
Duplicate Reporting	Income reported on Form 1042-S must not be reported on Form 1099, to avoid duplicate reporting of the same income.

Filling out the IRS 1042-S form is a detailed process that involves providing specific information to the Internal Revenue Service regarding payments made to foreign individuals or entities. This task is mandatory for entities that engage in such financial activities. It's essential to approach this form with care to ensure all information is accurate and complete. The following steps are designed to guide you through the process of filling out this form systematically.

Begin by gathering all necessary documentation related to the payments made to the foreign individuals or entities, including their identifying information and the total amount paid during the fiscal year.
Enter the payer's information in the top section of the form. This includes the payer's name, address, and the employer identification number (EIN).
Fill in the recipient’s information. This section requires the name, address, country of citizenship, and the taxpayer identification number (TIN) of the recipient.
Specify the type of income that was paid to the recipient in the appropriate box. This generally includes but is not limited to, wages, dividends, or scholarship funds.
Input the total amount of income paid to the foreign individual or entity during the reporting year in the currency in which the payment was made.
Calculate and enter any tax withheld from the payments. This requires understanding the applicable tax treaty rates or the default rate as prescribed by U.S. tax law.
If there are any exemptions applied due to treaty benefits, clearly indicate this in the specified area by noting the applicable article and paragraph of the treaty.
Review the information for accuracy and completeness. Mistakes can lead to compliance issues or delays in processing.
Sign and date the form at the bottom to certify that the information provided is correct to the best of your knowledge.
Finally, submit the form to the IRS by the required deadline to avoid penalties. Depending on your situation, the form may be submitted either electronically or in paper form.

Completing the IRS 1042-S form accurately is crucial for compliance with U.S. tax laws concerning payments to foreign entities or individuals. Taking your time to fill out each section carefully, and double-checking your work, can prevent potential issues. Remember, if there's any confusion about how to complete the form or if you need to clarify specific regulations, consulting a tax professional is always a wise decision.

What is a Form 1042-S?

Form 1042-S is a tax document used by the U.S. Internal Revenue Service (IRS) to report certain types of income paid to foreign individuals and entities. This includes, but is not limited to, salaries, dividends, royalties, and scholarship or fellowship grants that come from sources within the United States. The form serves both to report income and any applicable withholdings that might have been taken out for tax purposes.
Who needs to file Form 1042-S?

Form 1042-S must be filed by any U.S. entity that makes payments of the types described above to foreign individuals or entities. This can include universities, employers, or financial institutions, among others. The form is required for each recipient of such payments, meaning an entity may need to file multiple forms if it makes payments to more than one foreign individual or entity.
What information do I need to complete Form 1042-S?

To complete Form 1042-S, you'll need detailed information about both the payer (usually the U.S. entity making the payment) and the recipient (the foreign individual or entity receiving the payment). This includes the full name and address of each, the recipient's country of tax residence, and their U.S. taxpayer identification number (TIN), if they have one. Additionally, you'll need details of the payments made, including the total amount and the type of income paid. If any withholding was done, this must also be reported on the form.
What if I don't have a TIN?

Foreign individuals or entities receiving payment may not always have a U.S. Taxpayer Identification Number (TIN). In such cases, it's essential to make a note of this on Form 1042-S, following the specific instructions provided by the IRS for these situations. Depending on the circumstances, recipients might be encouraged to apply for a TIN to comply with U.S. tax laws and potentially avoid higher withholding rates.
When is Form 1042-S due?

Form 1042-S is generally due by March 15th of the year following the payment. If March 15th falls on a weekend or a public holiday, the due date is extended to the next business day. It's crucial to adhere to this deadline to avoid penalties for late filing. Copies of the form also need to be provided to the income recipient by the same date, allowing them to correctly file their tax returns if necessary.
How do I file Form 1042-S?

Form 1042-S can be filed electronically or on paper, although the IRS encourages electronic filing for efficiency and security reasons. Filing electronically is mandatory for entities submitting 250 or more forms. The IRS website provides instructions and links for electronic filing. For those who choose or need to file on paper, the forms must be ordered from the IRS, as photocopies are not accepted.
What are the penalties for not filing Form 1042-S?

Failure to file Form 1042-S, filing late, or filing an incorrect form can result in penalties. These penalties can vary, potentially including financial fines and interest on any underpaid taxes. The specifics depend on the extent of the delay and the nature of the mistake. The IRS may offer relief from penalties in certain situations if the filer can show that the failure was due to reasonable cause and not willful neglect.
Can Form 1042-S be amended?

Yes, if errors are discovered after Form 1042-S has been filed, it is possible, and often necessary, to amend the form. To do this, a new form should be completed with the correct information and marked as "Amended" to distinguish it from the original submission. Detailed instructions on how to properly amend Form 1042-S are available on the IRS website. It's important to correct any mistakes promptly to prevent or minimize penalties.

Filling out the IRS 1042-S form can be a complex process that requires careful attention to detail. This form is used to report amounts paid to foreign persons, including non-resident aliens, foreign partnerships, and corporations, in the preceding year. Mistakes can lead to delays or incorrect tax withholding and reporting. Here are four common mistakes people make when filling out this form:

Incorrect Taxpayer Identification Numbers (TINs): One frequent error is entering incorrect or incomplete Taxpayer Identification Numbers. This can include the Social Security Number (SSN), Employer Identification Number (EIN), or Individual Taxpayer Identification Number (ITIN) of the recipient. Accurate TINs are crucial for ensuring proper reporting and tax withholding.
Failing to Choose the Correct Income Code: The IRS 1042-S form requires the payer to select an income code that best describes the type of payment being reported. This code is essential for determining the tax rate and any exemptions that may apply. Choosing the wrong income code can lead to incorrect withholding and reporting.
Not Reporting in U.S. Dollars: All amounts must be reported in U.S. dollars, even if the payment was made in another currency. This requires the payer to convert the payment amount to U.S. dollars using the exchange rate in effect on the date of payment. Failing to report in U.S. dollars can lead to inaccuracies in the reported amounts.
Omitting or Misreporting Recipient Information: It is critical to provide detailed and accurate information about the recipient of the payment. This includes the recipient's name, address, and country of citizenship. Incomplete or incorrect recipient information can cause problems with the IRS and may result in the form being rejected.

By avoiding these common mistakes, filers can ensure smoother processing of their IRS 1042-S forms and stay compliant with U.S. tax laws. Whether you are a seasoned tax professional or a first-time filer, paying close attention to these details is key to successful tax reporting for payments to foreign persons.

When navigating the terrain of U.S. tax reporting and compliance, the IRS 1042-S form plays a pivotal role, especially for those handling foreign persons' U.S. source income subject to withholding. Beyond the 1042-S, understanding complementary forms and documents is key to a smooth process. These additional resources bolster compliance, ensuring that both individuals and organizations meet their tax obligations efficiently. Let's explore some of these essential forms and documents.

Form W-8BEN: This certificate is used by foreign individuals to claim exemption from withholding on income associated with service payments, dividends, and interest from U.S. sources. It establishes the individual's status as a foreign person and eligibility for reduced rates under income tax treaties.
Form W-8BEN-E: Tailored for foreign entities, this document serves a similar purpose to the W-8BEN but is specifically designed for corporations and organizations. It helps entities claim special tax treaty benefits, including exemptions and reduced withholding rates.
Form 8233: This form is for nonresident aliens who receive compensation for personal services performed in the U.S. It allows individuals to claim a withholding exemption based on a tax treaty between the U.S. and their country of residence.
Form 1042: Often used in tandem with the 1042-S, this annual withholding tax return form is for any U.S. entity that has paid amounts subject to reporting on Form 1042-S. It encompasses the total tax withheld from payments to foreign individuals and entities.

Understanding the interplay between the IRS 1042-S form and these additional documents is crucial for managing nonresident alien tax compliance. Each form has a distinct purpose, catering to different aspects of tax reporting and withholding for foreign individuals and entities. Leveraging these forms correctly not only ensures compliance but also maximizes efficiency in international transactions and payments. As the regulatory landscape continues to evolve, staying informed and prepared with the right documentation will always be a cornerstone of successful tax strategy and execution.

The IRS 1042-S form is closely related to the W-2 form, which many U.S. taxpayers are more familiar with. While the 1042-S documents income paid to foreign persons, the W-2 form reports wages, tips, and other compensation paid to employees who are U.S. citizens or resident aliens. Both forms serve to report income to the taxpayer and the IRS, but they cater to different groups of individuals based on their residency status.

Similarly, the 1042-S form echoes the Form 1099 series, especially the 1099-MISC, which reports various types of income other than wages, salaries, and tips. Like the 1042-S, 1099 forms report payments and financial transactions to the IRS and the recipient; however, 1099 forms generally apply to U.S. citizens and resident aliens, whereas the 1042-S is for foreign persons. The distinction lies in both the source of income and the recipient's tax status.

The IRS Form W-8BEN is another document that intersects with the purpose of the 1042-S form. Form W-8BEN is used by foreign individuals to certify their foreign status and claim any applicable treaty benefits for reduced withholding. This form is often submitted to the payer before the 1042-S form is necessitated, effectively preceding the 1042-S in the international taxation documentation process. The connection lies in their mutual aim to properly document and tax foreign individuals' income according to U.S. laws and treaties.

Form 1042, the Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, operates hand in hand with Form 1042-S. While the 1042-S form provides a detailed transaction-level report of income paid to foreign persons, Form 1042 serves as a summary tax return that reports the aggregate amount of U.S. source income paid out and the total tax withheld. Both are essential for compliance in withholding tax obligations towards foreign entities and individuals.

The Schedule K-1 (Form 1065) is utilized in a distinct but related context. It reports income, deductions, and credits of partners in a partnership. Although intended for a different recipient—partners in a partnership rather than foreign persons—the Schedule K-1 shares the 1042-S's underlying purpose of documenting taxable income and activities for tax reporting purposes. Each form ensures accurate tax liability calculation by providing detailed financial information to both the IRS and the tax filer.

Form 8966, the FATCA Report, has a tangential relationship with the 1042-S form. The FATCA Report is used under the Foreign Account Tax Compliance Act to report financial accounts held by foreign taxpayers, or by U.S. taxpayers with substantial foreign assets. While the 1042-S focuses on reporting income paid to these individuals, Form 8966 is concerned with the reporting of assets. Both contribute to the U.S. efforts to curb tax evasion by providing transparency in foreign income and assets.

The W-9 form, Request for Taxpayer Identification Number and Certification, parallels the 1042-S in its function of collecting taxpayer information for reporting purposes. U.S. persons use Form W-9 to provide their taxpayer identification number to entities that will pay them income during the tax year. The key difference from the 1042-S form lies in the recipient's tax status—W-9 is for U.S. persons, while 1042-S is for foreign persons—yet both forms are pivotal in ensuring the correct reporting and withholding of taxes.

Last, Form 8233, Exemption From Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual, is intricately linked with the 1042-S. This form is used by nonresident aliens to claim exemption from withholding on income for personal services due to a tax treaty. The form’s approval may affect how payments are reported on the 1042-S, demonstrating their interconnected roles in the administration of international taxation under U.S. law.

When preparing the IRS 1042-S form, used for reporting amounts paid to foreign persons, including non-resident aliens, foreign corporations, and foreign partnerships, certain practices should be followed to ensure accuracy and compliance. Here are essential do's and don'ts:

Do ensure that all information provided is accurate and matches the documentation for the foreign person or entity. Incorrect information can lead to delays or issues with processing.
Do utilize the IRS instructions for form 1042-S to guide you through each section. These instructions are updated periodically and provide the necessary details for each box on the form.
Do report each recipient's income on a separate form 1042-S. This is crucial for keeping records clear and organized, making it easier for both the IRS and the recipient to understand the details of the reported income.
Do use the official IRS electronic filing system, if possible, for submitting the form 1042-S. Electronic submission is more secure, more efficient, and can reduce the likelihood of errors.
Do keep copies of the 1042-S form and any related documentation for at least 7 years. This is important in case the IRS has questions or in case of an audit.
Don't omit any required fields or information. Incomplete forms can be rejected or result in unnecessary processing delays.
Don't guess on amounts or other details. Use precise figures and double-check all information for accuracy. Estimates or incorrect information can lead to issues with the IRS.
Don't neglect the importance of timely filing. Be aware of the submission deadlines and plan accordingly to avoid late fees or penalties.
Don't hesitate to consult with a tax professional if you encounter any doubts or confusion. The rules surrounding form 1042-S can be complex, and professional guidance can be invaluable.

The IRS 1042-S form is a critical document for foreign persons receiving U.S. source income, yet it's surrounded by misconceptions that can lead to confusion or errors in filing. Understanding these myths can help ensure compliance with U.S. tax laws and minimize potential issues.

Only non-U.S. citizens need to file it: While it's true that the 1042-S form is focused on foreign persons, U.S. entities that make payments to foreign persons must also deal with this form. They are responsible for reporting the income paid and any withholdings to the IRS.
It's only for reporting wages: This misconception limits the scope of the 1042-S form significantly. In reality, the form covers a wide range of U.S. source income paid to foreign persons, including not just wages but also scholarships, royalties, dividends, and more. Thus, it encompasses a broader array of transactions than many realize.
It replaces the need for a W-2 or 1099 form: The 1042-S is not a substitute for W-2 or 1099 forms. While they all report income, the 1042-S form is specifically for foreign persons. U.S. citizens and resident aliens will receive a W-2 or 1099 form for their income reporting. Understanding the distinct purpose of each form is crucial for proper tax filing.
Filing the 1042-S form is the sole responsibility of the foreign person receiving income: This is a common misunderstanding. In fact, it is the responsibility of the U.S. entity that pays the foreign person to file the 1042-S form with the IRS and to furnish a copy to the income recipient. Foreign persons may need to report this income on their own tax returns, but they are not responsible for filing the 1042-S form.

By dispelling these myths, both payers and recipients of U.S. source income to foreign persons can better navigate the complexities of tax reporting and compliance, avoiding common pitfalls that may arise from misconceptions about the 1042-S form.

Understanding the IRS 1042-S form is essential for entities that pay income to foreign persons, including individuals, corporations, partnerships, trusts, estates, and more. This form is used to report amounts paid from U.S. sources to foreign persons that are subject to income tax reporting—even if not necessarily subject to withholding. Here are eight key takeaways to keep in mind when dealing with the 1042-S form:

Know Who Must File: The 1042-S form must be filled out by any U.S. entity that pays reportable amounts to foreign individuals or entities. This includes universities, businesses, and financial institutions that have engaged in transactions involving foreign payments.
Understand What to Report: This form is used for reporting various types of income, such as dividends, royalties, scholarship or fellowship grants, and other types of payments, including compensations for services performed by non-residents.
Distinguish Between 1042-S and W-8BEN: The recipients of income might need to fill out Form W-8BEN to certify their foreign status and claim any applicable treaty benefits. However, it is the payer's responsibility to complete and file the 1042-S form.
Be Aware of the Deadline: The 1042-S form, along with Form 1042 (the tax return for U.S. source income of foreign persons), must be filed with the IRS by March 15th of the year following the payment. Extensions are available, but they must be requested.
Pay Attention to Withholding Requirements: Even if tax was not withheld from payments made to foreign individuals or entities, reporting through the 1042-S form is still required. It's important to understand withholding obligations, as failure to withhold when necessary can lead to penalties.
Maintain Accurate Records: Keeping detailed records of all transactions and payments made to foreign persons is crucial. This documentation will support the amounts reported on the 1042-S form and can be invaluable in case of an audit.
Utilize the Right Income and Exemption Codes: The 1042-S form contains a variety of income and exemption codes. Selecting the correct codes is crucial for accurately reporting the nature of the payment and any applicable exemptions under tax treaties.
Seek Professional Advice: Given the complexity of tax laws and treaties, it is wise to seek advice from a tax professional. They can provide guidance tailored to specific situations, ensuring compliance and minimizing the risk of errors.

Handling the 1042-S form with care and diligence ensures compliance with U.S. tax reporting and withholding requirements for payments made to foreign persons. Awareness and understanding of the obligations it entails can help in avoiding penalties and fostering smooth international dealings.

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14b Primary Withholding Agent’s EIN

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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