Instructions for Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding Revision Date 12/20/2021

• Issuer: Treasury Department
• Section: Treasury Department

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2024

Instructions for Form 1042-S

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

Department of the Treasury

Internal Revenue Service

Contents Page

General Instructions ......................... 2

Purpose of Form ............................ 2

Who Must File ............................. 3

Where, When, and How To File ................. 3

Definitions ................................ 5

Amounts Subject to Reporting on Form 1042-S ...... 9

Amounts That Are Not Subject to Reporting on

Form 1042-S .......................... 10

Distributions Attributable to Dispositions of U.S.

Real Property Interests by Publicly Traded

Trusts and Qualified Investment Entities ....... 11

Publicly Traded Partnerships (Sections 1446(a)

and (f) Withholding Tax) .................. 11

Requirement To Withhold .................... 12

Before Completing Form 1042-S ............... 12

Payments by U.S. Withholding Agents ........... 13

Amounts Paid by QIs ........................ 18

Amounts Paid by Nonqualified Intermediaries and

Flow-Through Entities .................... 21

Multiple Withholding Agent Rule ............... 22

Penalties ................................ 23

Avoid Common Errors ....................... 23

Specific Instructions for Withholding Agents ....... 24

Rounding Off to Whole Dollars ................. 24

Amended Checkbox ........................ 24

Amendment Number ........................ 24

Box 1, Income Code ........................ 24

Box 2, Gross Income ........................ 25

Box 3 .................................. 26

Box 5, Withholding Allowance ................. 28

Boxes 7a Through 11, Federal Tax Withheld ....... 28

Box 12a, Withholding Agent's Employer

Identification Number (EIN) ................ 29

Boxes 12d Through 12i, Withholding Agent's

Name, GIIN, Country Code, Foreign TIN (if

any), and Address ...................... 29

Boxes 15a Through 15i, Intermediary/

Flow-Through Entity's Name, Status Code,

Country Code, Address, EIN, GIIN, and

Foreign Tax Identification Number ........... 32

Boxes 16a Through 16e, Payer's Name, TIN, GIIN,

and Status Code ........................ 33

Boxes 17a Through 17c, State Income Tax

Withheld and Related Information ........... 33

Amended Forms ........................... 33

Index ................................... 36

Section references are to the Internal Revenue Code unless

otherwise noted.

Future Developments

For the latest information about developments related to

Form 1042-S and its instructions, such as legislation enacted

after they were published, go to IRS.gov/Form1042S.

What’s New

Reporting of distributions of publicly traded partner-

ships (PTPs). The instructions for boxes 16a through 16e

state that a withholding agent for a PTP distribution is

required to provide the applicable information for the PTP in

the payer's box (including code 38) when reporting the

payment of a PTP distribution using income code 27, 57, or

58. These instructions have been updated to clarify that the

requirement to report the PTP's information with respect to its

distribution does not apply to a withholding agent paying a

PTP distribution to a Qualified Intermediary (QI) when

reporting to the QI in reporting pools on Forms 1042-S with

respect to the distribution. Under these instructions, this

exception also applies to a QI reporting a PTP distribution

using reporting pools. See Boxes 16a Through 16e, Payer's

Name, TIN, GIIN, and Status Code, later. For this change and

other clarifications for the reporting of PTP distributions, see

Publicly Traded Partnerships (Sections 1446(a) and (f)

Withholding Tax), later.

Reporting of a GIIN. The 2023 Form 1042-S instructions

contained a note, which stated that if a payment was properly

classified with a chapter 3 indicator in box 3, the withholding

agent was not required to enter a GIIN in boxes 12e, 13h,

15e, and 16c. This exception to the reporting of a GIIN has

been removed from these instructions. See the instructions

for the above boxes for when a GIIN is required. See the

instructions for boxes 16a through 16e for when a GIIN is

required for a PTP reported in box 16a.

Reminders

Electronic filing. A withholding agent that is not a financial

institution is required to file Forms 1042-S electronically if it is

either required to file at least 10 information returns during

the year or is a partnership with more than 100 partners. See

Regulations section 301.6011-2.

Income code 56. Income code 56 was added to the 2022

Form 1042-S to address section 871(m) transactions

resulting from combining transactions under Regulations

section 1.871-15(n) (including as modified by transition relief

under Notice 2022-37, 2022-37 I.R.B. 234, available at

IRS.gov/irb/2022-37_IRB#NOT-2022-37, when applicable).

Income code 56 should be used for any dividend equivalent

pursuant to a transaction that is a section 871(m) transaction

as a result of combining transactions, even if another income

code could apply to the dividend equivalent. See Box 1,

Income Code, later, for additional information.

Reliance on proposed regulations reducing burden un-

der FATCA and chapter 3. On December 18, 2018, the IRS

and the Department of the Treasury issued proposed

regulations (REG-132881-17) to reduce taxpayer burden with

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respect to certain requirements under chapters 3 and 4. The

proposed regulations provide that, under section 7805(b)(1)

(C), taxpayers may generally rely on the proposed

regulations until final regulations are issued. Specifically, for

purposes of these instructions, a withholding agent may rely

on the following provisions in connection with completing

Form 1042-S.

•Withholding and reporting in a subsequent year. A

partnership or trust that is permitted to withhold in a

subsequent year with respect to a foreign partner's or

beneficiary's share of income for the prior year may

designate the deposit of the withholding as attributable to the

preceding year and in some cases a partnership is provided

an extended due date for filing and furnishing Form 1042-S.

See the instructions for box 7c, later.

•Adjustments to overwithholding under the

reimbursement and set-off procedures. A withholding

agent may make adjustments to overwithholding using either

the reimbursement or set-off procedures until the extended

due date for filing Form 1042-S (unless the Form 1042-S has

already been filed or furnished). Additionally, a withholding

agent may use the extended due date for filing a Form 1042

to claim a credit for any adjustments made to

overwithholding. See the instructions for box 9, later.

Withholding rates. The rate of withholding under section

1446(a) by a PTP on a distribution of income effectively

connected to a U.S. trade or business is 21% for corporate

partners and 37% for all other partners.

The rate of withholding by a qualified investment entity

(QIE) on a distribution to a nonresident alien or foreign

corporation that is treated as gain from the sale or exchange

of a U.S. real property interest by the shareholder is 21%.

Qualified derivatives dealers (QDDs). These instructions

provide guidance on how to report payments on Form 1042-S

that are made to and by QDDs. See Payments by U.S.

Withholding Agents and Amounts Paid by QIs, later. For more

information on the withholding and reporting requirements

associated with payments made to and by QDDs, see Rev.

Proc. 2022-43, 2022-52 I.R.B. 570, available at IRS.gov/irb/

2022-52_IRB#RP-2022-43. See also Notice 2022-37,

2022-37 I.R.B. 234 available at IRS.gov/irb/

2022-37_IRB#NOT-2022-37, which extends the phase-in

period provided in Notice 2020-2, 2020-3 I.R.B. 327,

available at IRS.gov/irb/2020-03_IRB#NOT-2020-2, for

certain provisions of the section 871(m) regulations for 2

years (including 2024), including for certain requirements of a

QDD.

Foreign Account Tax Compliance Act (FATCA). Form

1042-S reports payments and amounts withheld under the

provisions commonly known as FATCA or chapter 4 of the

Internal Revenue Code (chapter 4) in addition to those

amounts required to be reported under chapter 3 of the

Internal Revenue Code (chapter 3). Form 1042-S requires

the reporting of an applicable exemption to the extent

withholding under chapter 4 did not apply to a payment of

U.S. source fixed or determinable annual or periodical

(FDAP) income (including deposit interest) that is reportable

on Form 1042-S. For payments to intermediaries,

flow-through entities, and recipients, Form 1042-S requires

that the chapter 3 status (or classification) and, when the

payment reported is a withholdable payment, the chapter 4

status, be reported on the form according to the codes

provided in these instructions. For the requirement of a

withholding agent to file a Form 1042-S for chapter 4

purposes, see Regulations section 1.1474-1(d).

Filing Information Returns Electronically (FIRE) System.

For files submitted on the FIRE System, it is the responsibility

of the filer to check the status within 5 business days to verify

the results of the transmission. The IRS will not mail error

reports for files that are bad. See Pub. 1187, Specifications

for Electronic Filing of Form 1042-S, Foreign Person’s U.S.

Source Income Subject to Withholding.

Unique form identifier. Withholding agents must assign a

unique identifying number to each Form 1042-S they file. This

identifying number is used, for example, to identify which

information return is being corrected or amended when

multiple information returns are filed by a withholding agent

with respect to the same recipient. The unique identifying

number cannot be the recipient's U.S. or foreign TIN. The

unique identifying number must be numeric. The length of a

given identifying number must be exactly 10 digits. The

identifying number must be unique to each original Form

1042-S filed for the current year. The identifying number can

be used on a new original form in a subsequent year.

List of foreign country codes. Form 1042-S filers must

use the same list of country codes used on other IRS forms

(for example, Forms 926, 1118, 3520, and 8805). This list of

foreign country codes may be found at IRS.gov/

CountryCodes.

Note. Although the list of country codes is maintained by

Modernized e-File, Form 1042-S filers who file electronically

will continue to use the FIRE System. See the instructions for

Electronic Reporting, later. Also, if applicable, the option to

file Form 1042-S by paper is still available.

General Instructions

Purpose of Form

Use Form 1042-S to report income described under Amounts

Subject to Reporting on Form 1042-S, later, and to report

amounts withheld under chapter 3 or chapter 4.

Use Form 1042-S to report specified federal procurement

payments paid to foreign persons that are subject to

withholding under section 5000C.

Use Form 1042-S to report payments of eligible deferred

compensation items or distributions from nongrantor trusts to

covered expatriates that are subject to withholding under

section 877A. See Box 1, Income Code, later.

Use Form 1042-S to report certain distributions that are

made by publicly traded trusts and QIEs (as defined under

section 897(h)(4)(A)). See Distributions Attributable to

Dispositions of U.S. Real Property Interests by Publicly

Traded Trusts and Qualified Investment Entities, later.

Use Form 1042-S to report distributions of effectively

connected income (ECI) by a PTP or nominee and amounts

realized paid on certain transfers of PTP interests. See

Publicly Traded Partnerships (Section 1446(a) and (f)

Withholding Tax), later.

Every person required to deduct and withhold any tax

under chapter 3 or chapter 4 is liable for such tax.

Do not use Form 1042-S to report an item required to be

reported on any of the following forms.

•Form W-2 (wages and other compensation made to

employees (other than compensation for dependent personal

services for which the beneficial owner is claiming treaty

CAUTION

!

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benefits), including wages in the form of group-term life

insurance).

•Form 1099 (except if indicated otherwise in these

instructions).

•Form 8288-A, Statement of Withholding on Certain

Dispositions by Foreign Persons, or Form 8805, Foreign

Partner's Information Statement of Section 1446 Withholding

Tax. Withholding agents otherwise required to report a

distribution partly on a Form 8288-A or Form 8805 and partly

on a Form 1042-S may instead report the entire amount on

Form 8288-A or Form 8805.

•Form 8966, FATCA Report. Foreign financial institutions

(FFIs), sponsoring entities of certain FFIs and other foreign

entities, and withholding agents are required to report on

Form 8966 certain account holders and payees. An FFI or

withholding agent may also be required to file Form 1042-S to

report payments of U.S. source FDAP income made to such

persons and to report tax deducted and withheld, if any.

Who Must File

Every withholding agent (defined in Definitions, later) must

file an information return on Form 1042-S to report amounts

paid during the preceding calendar year that are described

under Amounts Subject to Reporting on Form 1042-S, later.

However, withholding agents who are individuals are not

required to report a payment on Form 1042-S if they are not

making the payment as part of their trade or business and no

withholding is required to be made on the payment. For

example, an individual making a payment of interest that

qualifies for the portfolio interest exception from withholding

is not required to report the payment if the portfolio interest is

paid on a loan that is not connected to the individual's trade

or business. However, an individual who is a withholding

agent paying an amount that actually has been subject to

withholding is required to report the payment. Also, an

individual paying an amount on which withholding is required

must report the payment, whether or not the individual

actually withholds. See Multiple Withholding Agent Rule,

later, for exceptions to reporting when another person has

reported the same payment to the recipient. Note that there

may be a payment for tax purposes, even if there is no net

payment. For example, see Regulations section 1.871-15(i)

for when there is a dividend equivalent.

You must file a Form 1042-S even if you did not withhold

tax under chapter 3 because the income was exempt from

tax under a U.S. tax treaty or the Internal Revenue Code,

including the exemption for income that is effectively

connected with the conduct of a trade or business in the

United States, or you released the tax withheld to the

recipient. For exceptions, see Amounts That Are Not Subject

to Reporting on Form 1042-S, later.

Amounts paid to an individual that is a bona fide resident

of a U.S. territory are not subject to reporting on Form 1042-S

if the beneficial owner of the income is a U.S. citizen,

national, or resident alien (such amounts may be subject to

Form 1099 reporting).

If you file Form 1042-S, you must also file Form 1042,

Annual Withholding Tax Return for U.S. Source

Income of Foreign Persons. See Form 1042 and its

instructions for more information.

Where, When, and How To File

Forms 1042-S, whether filed on paper or electronically, must

be filed with the IRS and be furnished to the recipient of the

income by March 15, 2025. If the 15th falls on a Saturday,

CAUTION

!

Sunday, or legal holiday in the District of Columbia or where

the return is to be filed, the due date is the next business day.

Copy A is filed with the IRS. Send all paper Forms 1042-S

with Form 1042-T, Annual Summary and Transmittal of Forms

1042-S, to the address in the Form 1042-T instructions. You

must use Form 1042-T to transmit paper Forms 1042-S. Use

a separate Form 1042-T to transmit each type of Form

1042-S. See Payments by U.S. Withholding Agents, later,

and the Form 1042-T instructions for more information.

Electronic filing requirement. See Electronic Reporting,

later, for information on who is required to file Form 1042-S

electronically.

Attach only Copy A to Form 1042-T. Provide Copies

B, C, and D to the recipient of the income. All copies

must match the copy filed with the IRS. Any

differences between the copy of the form issued to recipients

and the copy filed with the IRS will lead to delays in

processing the recipient's tax return. The IRS may disallow

claims for refund or credit for amounts withheld reported on

Form 1042-S if the form attached to such claims differs from

the copy that was filed with the IRS.

With respect to a withholdable payment, the recipient copy

should be provided to the intermediary or flow-through entity

named as a recipient with respect to a chapter 4 reporting

pool, if applicable.

Extension of time to file. To request an extension of time to

file Forms 1042-S, file Form 8809, Application for Extension

of Time To File Information Returns. See the instructions for

Form 8809 at IRS.gov/Form8809 for where to file that form.

You should request an extension as soon as you are aware

that an extension is necessary, but no later than the due date

for filing Form 1042-S. By filing Form 8809, you will get an

automatic 30-day extension to file Form 1042-S. If you need

more time, you may submit a second Form 8809 before the

end of the initial extended due date. See Form 8809 for more

information.

Recipient copies. You may request an extension of time

to provide the statements to recipients by faxing a letter to:

Internal Revenue Service

Technical Services Operation

Attn: Extension of Time Coordinator

Fax: 877-477-0572

(International 304-579-4105)

The letter must include:

1. Your name,

2. Your TIN,

3. Your address,

4. Type of return (Form 1042-S),

5. A statement that your extension request is for

providing statements to recipients,

6. Reason for delay, and

7. The signature of the payer or authorized agent.

Your request must be received no later than the date the

Forms 1042-S are due to the recipients. If your request for an

extension is approved, generally you will be granted a

maximum of 30 extra days to furnish the recipient statements.

See Extension to provide statements to recipients in Pub.

515, Withholding of Tax on Nonresident Aliens and Foreign

Entities.

TIP

Instructions for Form 1042-S (2024) 3