Form 1042-S

What Is IRS Form 1042-S?

Form 1042-S is a Department of the Treasury Internal Revenue Service form titled Foreign Person’s U.S. Source Income Subject to Withholding. Typically, non-citizens of the United States are subject to tax on any income derived from U.S. sources. Therefore, Form 1042-S is commonly used to report any amount paid to foreign persons by a U.S.-based business or institution.

Form 1042-S applies to foreign partnerships, foreign estates, foreign trusts, and resident aliens that are subject to income tax withholding. Each type of income requires a separate 1042-S form. Here’s a shortlist of common income that requires reporting:

• Royalties
• Scholarships
• Pension income
• Deposit interest
• Gambling winnings
• Insurance premiums
• American corporation dividend payments
• Personal service compensation performed in the U.S.

Who Must File 1042-S?

Employers who employ non-resident aliens like foreign workers or international students need to file IRS Form 1042-S for every non-resident alien employed. They must also send a completed copy of said form to the non-resident alien employed.

Forms 1042 and 1042-S are due by March 15th of year following that in which the income was paid. Some years, like 2020 and 2021, this filing date was extended.

Sometimes Form 1042-S gets distributed for informational purposes. In this case, you don’t need to include it with your return. One way to know if it’s for informational purposes is if Box 7 and 10 are both zero. If they’re not, then it needs reporting. It’s also worth noting that Form 1042-S should always be filed with 1042-T. Form 1042 is the only form in this series that can be filed by itself.

What Is the Difference Between Form 1042 and 1042-S?

The two forms are similar but not identical and should be filed separately. IRS Form 1042 determines how much income is withheld, while Form 1042-S reports payments made to foreign persons.

Answers to questions like “what is form 1042 S?” and “where can I get a copy?” are easily found on the IRS website. When in doubt, it’s best to get legal and accounting advice from professionals. Tax laws are complex for U.S. citizens and can be even more confusing to non-residents.

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