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Fillable Form 1042-S (2020)

Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, is used to report income, report specified federal procurement payments paid to foreign persons, report payments of eligible deferred compensation or distributions, and report certain distributions.

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What is Form 1042-S?

Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, is a tax form by the Internal Revenue Service (IRS) that taxpayers use when they are reporting any of the following:

  • Any income and amounts withheld that the IRS describes in the Instructions Section of Form 1042-S.
  • Specified federal procurement payments that a taxpayer paid to foreign persons which are subject to withholding under section 5000C.

NOTE: Section 5000 C imposes a tax of 2% on foreign people that receive specified procurement payments. A specified federal procurement payment is a payment made to a foreign person pursuant to a contract with the U.S. government for (1) the provision of goods that are manufactured or produced in a country that does not have an international procurement agreement with the United States, or (2) the provision of services in a country that does not have an international procurement agreement with the United States.

  • Distributions of effectively connected income by a publicly traded partnership or nominee.

Who must file Form 1042-S?

The IRS requires withholding agents to file an information return on Form 1042-S to report the income they have during the previous calendar year.

When to file Form 1042-S?

Withholding agents must file Form 1042-S with the IRS by March 15 of every tax year. In addition, you are to furnish Form 1042-S to the recipient of income reported by March 15 of every tax year.

How to fill out Form 1042-S?

UNIQUE FORM IDENTIFIER

Enter the 10-digit unique identifying number you assigned to Form 1042-S you are filing. This cannot be the recipient’s U.S. nor foreign Tax Identification Number (TIN).

Box 1 — Income code

Enter the two-digit numerical code to identify the type of income that was paid to you.

Box 2 — Gross Income

Enter the total amount of the income that was paid to you.

Box 3 — Chapter indicator. Enter “3” or “4”

Enter the applicable tax rule to your payment.

Box — 3a Exemption code

If you enter 3 in box 3 — Chapter Indicator, enter the reason for your tax rate.

Box 3b — Tax rate

If you enter 3 in box 3 — Chapter Indicator, enter the rate applicable for the type of income you are reporting.

Box 4a — Exemption code

If you enter 4 in box 3 — Chapter Indicator, enter the reason for your tax rate.

Box 4b — Tax rate

If you enter 4 in box 3 — Chapter Indicator, enter the rate applicable for the type of income you are reporting.

Box 5 — Withholding allowance
Complete this box if you reported any of the income codes 16, 17, 18, 19, 20, or 42 in Box 1.

Leave this box blank if you are a withholding agent that has entered into a central withholding agreement with the IRS and report the gross amount paid to the recipient in Box 2.

Box 6 — Net income

Enter the difference between the gross income you entered and the withholding allowance, if there is.

Box 7a — Federal tax withheld

Enter the total amount of U.S. federal tax withheld; if no tax was withheld, enter 0.

The total amount of the tax withheld is the product of net income and tax rate.

Box 7b — Check if federal tax withheld was not deposited with the IRS because escrow procedures were applied (see instructions)

Mark the checkbox if you did not deposit federal tax withheld with the IRS due to applied escrow procedures.

Box 7c — Check if withholding occurred in the subsequent year with respect to a partnership interest

Mark the checkbox if you are a partnership that receives an amount subject to withholding during the previous calendar year and you are withholding an amount in a foreign partner’s share after March 15 of the subsequent calendar year.

Box 8 — Tax withheld by other agents

Enter the amount withheld by the other agents.

This is only applicable to withholding agents who are filing a Form 1042-S to report income that has already been subject to withholding by another agent.

Box 9 — Over withheld tax repaid to recipient pursuant to adjustment procedures (see instructions)

Enter the amount that you repaid to a recipient that is under the reimbursement or set-off procedures during a tax year, as per the requirements of specific regulations per chapter.

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

Enter the sum of reported federal tax withheld, tax withheld by other agents, and overwithheld tax repaid to recipient pursuant to adjustment procedures.

Box 11 — Tax paid by withholding agent (amount withheld) (see instructions)

Enter the amount of the tax you have paid and not withheld from the payment to the recipient.

Box 12a — Withholding agent’s EIN - Employer Identification Number

Enter your Employer Identification Number (EIN).

If you are filing Form 1042-S as QI - Qualified Intermediary, WP - Withholding Foreign Partnership, and WT - Withholding Foreign Trust, enter your QI - EIN, WP - EIN, or WT - EIN.

Box 12b — Ch. 3 status code

Enter the withholding status code(s) which apply from the list of Recipient Status Codes that the IRS provides. Regardless of the type of payment, you must enter both a chapter 3 and 4 withholding agent status code.

Box 12c — Ch. 4 status code
Enter the withholding status code(s) which apply from the list of Recipient Status Codes that the IRS provides. Regardless of the type of payment, you must enter both a chapter 3 and 4 withholding agent status code.

Box 12d — Withholding agent’s name

Enter your legal name.

Box 12e — Withholding agent’s Global Intermediary Identification Number (GIIN)

Enter your GIIN provided if there is any.

Box 12f — Country code

Enter the code from the list of the IRS, for the country in which you are resident under that country's tax laws. In case your country of residence is not on the list, enter OC (other country).

Box 12g — Foreign tax identification number, if any

Enter your foreign TIN, if there is any.

Box 12h — Address (number and street)

Enter your street number and street name.

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

Enter your city or town, state or province, and ZIP or foreign postal code.

Box 13a — Recipient’s name

Enter the recipient’s complete name.

Box 13b — Recipient’s country code

Enter the code from the list of the IRS, for the country in which the recipient claims residency under that country's tax laws. In case the recipient’s country of residence is not on the list, enter OC (other country).

Box 13c — Address (number and street)

Enter the recipient’s street number and street name. Note that you must enter a foreign address; however, if you are reporting payments of scholarship or fellowship, you may enter a U.S. address.

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

Enter the recipient’s city or town, state or province, and ZIP or foreign postal code. For addresses within the United States, enter just the two-letter abbreviation for the state name.

Box 13e — Recipient’s U.S. TIN, if any

Enter the recipient’s U.S. TIN. As per the IRS, a U.S. TIN is required for any of the following recipients:

  • Any recipient whose income is effectively connected with the conduct of a trade or business in the United States.
  • Any foreign person claiming a reduced rate of, or exemption from, tax under a tax treaty between a foreign country and the United States
  • Any nonresident alien individual claiming exemption from tax under section 871(f) for certain annuities received under qualified plans.
  • A foreign organization claiming an exemption from tax solely because of its status as a tax-exempt organization under section 501(c) or as a private foundation.
  • Any QI.
  • Any WP or WT.
  • Any nonresident alien individual claiming exemption from withholding on compensation for independent personal services.
  • Any U.S. branch of an FFI or territory FI that is treated as a U.S. person.
    FFI, Foreign Financial Institution is an entity treated as a financial institution under an Intergovernmental Agreement (IGA).
  • Any QSL (Qualified Securities Lender) that was paid a substitute dividend.

Box 13f — Ch. 3 status code

Enter the recipient’s status code for chapter 3, from the IRS’ list of Recipient Status Codes.

Box 13g — Ch. 4 status code

You must enter a chapter 4 status code if the payment is subject to withholding or when a participating FFI or registered deemed-compliant FFI provides a chapter 4 withholding rate pool of U.S. payees.

Box 13h Recipient’s GIIN

Enter GIIN if you are required to collect it for the recipient under the requirements documenting the payee under chapter 4.

Box 13i — Recipient’s foreign tax identification number, if any

Enter the recipient’s identification number from the recipient’s residential country for tax purposes.

Box 13j — LOB code

Enter the applicable LOB - Limitation on Benefits code if you provided documentation that establishes LOB and you are making a payment for which a beneficial owner that is an entity has claimed a reduced rate of withholding under an income tax treaty.

Box 13k — Recipient’s account number

Enter the recipient’s account number only if you are a financial institution reporting amounts paid to your direct account holder with respect to an account maintained by you at your U.S. office or U.S. branch.

Box 13l — Recipient’s date of birth (YYYYMMDD)

Enter the recipient’s date of birth in YYYYMMDD format.

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

Enter your name if you are the primary withholding agent. This is only applicable if multiple withholding agents withheld amounts reported on the same Form 1042-S.

Box 14b — Primary Withholding Agent’s EIN

Enter the EIN of the withholding agent that withheld the tax. This is only applicable if multiple withholding agents withheld amounts reported on the same Form 1042-S.

Box 15 — Check if pro-rata basis reporting

Mark the checkbox to notify the IRS that an NQI that used the alternative procedures failed to properly comply with those procedures.

NQI, Nonqualified Intermediary is an intermediary that is not a U.S. person and that is not a QI.

Box 15a — Intermediary or flow-through entity’s EIN, if any

Enter the entity’s EIN if you are reporting amounts paid to a recipient whose withholding certificates or other documentation has been submitted to you with a Form W-8IMY provided by an intermediary or flow-through entity.

Box 15b — Ch. 3 status code

Enter the applicable chapter 3 status code if you are a withholding agent that is an intermediary or flow-through.

Box 15c — Ch.4 status code

Enter the applicable chapter 4 status code if you are a withholding agent that is an intermediary or flow-through.

Box 15d — Intermediary or flow-through entity’s name
Enter the entity’s name if you are reporting amounts paid to a recipient whose withholding certificates or other documentation has been submitted to you with a Form W-8IMY provided by an intermediary or flow-through entity.

Box 15e — Intermediary or flow-through entity’s GIIN
Enter the entity’s GIIN if you are reporting amounts paid to a recipient whose withholding certificates or other documentation has been submitted to you with a Form W-8IMY provided by an intermediary or flow-through entity.

Box 15f — Country code

Enter the country code from the IRS list for the country where the intermediary or flow-through entity is located.

Box 15g — Foreign tax identification number, if any
Enter the intermediary or flow-through entity's identifying number used in the country of residence for tax purposes.

Box 15h — Address (number and street)
Enter your street name and number if you are a withholding agent that is an intermediary or flow-through.

Box 15i — City or town, state or province, country, ZIP or foreign postal code
Enter your city or town, state or province, and ZIP or foreign postal code if you are a withholding agent that is an intermediary or flow-through.

Box 16a — Payer’s name

Enter the payer’s name.

Box 16b — Payer’s TIN

Enter the payer’s Tax Identification Number.

Box 16c — Payer’s GIIN

Enter the payer’s GIIN, only if it is different from the withholding agent shown in boxes 12a, 12d, and 12e.

Box 16d — Ch. 3 status code

Enter the applicable chapter 3 status code of the payer.

Box 16e — Ch. 4 status code

Enter the applicable chapter 4 status code of the payer.

Box 17a — State income tax withheld

Enter the state income tax that the payer withheld.

Box 17b — Payer’s state tax no.

Enter the payer’s state tax number.

Box 17c — Name of state

Enter the state where the payer has tax withheld.

What are the amounts taxpayers need to report?

Amounts subject to reporting are amounts which U.S. sources have paid to foreign persons or amounts under chapters 3 and 4 of the Form 1042-S. You must report the amounts from sources within the United States if they constitute:

(a) fixed or determinable annual or periodical (FDAP) income (including deposit interest)
(b) certain gains from the disposal of timber, coal, or domestic iron ore with a retained economic interest
(c) gains relating to contingent payments received from the sale or exchange of patents, copyrights, and similar intangible property.

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