Instructions for IRS Form 1042-s - Foreign Person's U.S. Source Income Subject to Withholding 2018

January 1, 2018 "Instructions For Irs Form 1042-s - Foreign Person's U.s. Source Income Subject To Withholding" contain the updated filing procedures for the IRS-issued Form 1042-S. Download your copy of the instructions by clicking the link below.

IRS Form 1042-S is a tax form issued by the United States Internal Revenue Service.

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2018
Department of the Treasury
Internal Revenue Service
Instructions for Form 1042-S
Foreign Person's U.S. Source Income Subject to Withholding
2017, the rate of withholding under
provisions commonly known as FATCA
Section references are to the Internal Revenue
Code unless otherwise noted.
section 1446 by a publicly traded
or Chapter 4 of the Internal Revenue
partnership on a distribution of income
Code (chapter 4) in addition to those
Future Developments
effectively connected to a U.S. trade or
amounts required to be reported under
For the latest information about
business has changed to 21% for
Chapter 3 of the Internal Revenue Code
developments related to Form 1042-S,
corporate partners and 37% for all other
(chapter 3). Form 1042-S requires the
and its instructions, such as legislation
partners.
reporting of an applicable exemption to
enacted after they were published, go to
the extent withholding under chapter 4
For tax years beginning after
IRS.gov/Form1042-S.
did not apply to a payment of U.S
December 31, 2017, the rate of
source fixed or determinable annual or
withholding by a Qualified Investment
General Instructions
periodical (FDAP) income (including
Entity on a distribution to a nonresident
deposit interest) that is reportable on
alien or foreign corporation that is
What's New
Form 1042-S. For payments to
treated as gain from the sale or
intermediaries, flow-through entities,
exchange of a U.S. real property
Boxes 9 and 11 of Form 1042-S have
and recipients, Form 1042-S requires
interest by the shareholder has changed
been switched and clarifying language
that the chapter 3 status (or
to 21%.
has been added to those boxes on the
classification) and, when the payment
form. Clarifying language has also been
Changes to codes. To reflect changes
reported is a withholdable payment, the
added to boxes 7b and 10 of the form,
made to the chapter 4 regulations
chapter 4 status, be reported on the
and the instructions for
Boxes 7
regarding U.S. branches of foreign
form according to the codes provided in
Through 11, Federal Tax
Withheld.
entities that act as intermediaries,
these instructions. For the requirement
chapter 4 status codes have been
These instructions have been revised
of a withholding agent to file a Form
added for U.S. branches treated as U.S.
to modify and add certain definitions.
1042-S for chapter 4 purposes, see
persons and U.S. branches not treated
See Definitions, later.
Regulations section 1.1474-1(d).
as U.S. persons that are reporting under
New sections
Requirement To
Interest on deposits. Beginning
Regulations section 1.1471-4. Finally,
Withhold
and
Before Completing Form
January 1, 2013, deposit interest
the LOB Treaty Category code for
1042-S
have been added to clarify a
described in section 871(i)(2)(A)
individuals (code 01) has been
withholding agent's obligations under
aggregating $10 or more paid to certain
removed. Withholding agents making
chapters 3 and 4 and provide general
nonresident alien individuals with
payments to an individual who is
steps that should be considered when
respect to a deposit maintained at an
claiming treaty benefits should leave
completing Form 1042-S.
office within the United States and held
Box 13j blank.
by a resident of certain countries must
The income codes, exemption
Qualified derivatives dealers
be reported on Form 1042-S. For more
codes, recipient status codes, and LOB
(QDDs). These instructions provide
information, see Interest on deposits
codes have been moved to the end of
guidance on how to report payments on
paid to certain nonresident aliens in the
the instructions (see
Appendix A
and
Form 1042-S that are made to and by
bullet list under
Amounts Subject to
Appendix
B).
QDDs. See
Payments by U.S.
Reporting on Form
1042-S, later.
Withholding Agents
and
Amounts Paid
Appendix C
has been added. It
Substitute forms. A substitute form
by Qualified
Intermediaries, later. For
provides an expanded Example 1,
furnished to a recipient must conform in
more information on the withholding and
which explains how to complete Form
format and size to the official IRS form
reporting requirements associated with
1042-S for a payment of U.S. source
and contain the exact same information
payments made to and by QDDs, see
FDAP income made directly to a
as the copy filed with the IRS. However,
Revenue Procedure 2017-15.
beneficial owner. This expanded
the size of the form may be adjusted if
Example 1 is comprehensive in that it
Foreign taxpayer identification num-
the substitute form is presented on a
provides information regarding how to
ber (FTIN). These instructions reflect
landscape oriented page instead of
complete every applicable entry field on
updated requirements for 2018 for when
portrait. Only one Form 1042-S may be
Form 1042-S, along with explanations
a financial institution must report an
submitted per page, regardless of
for each of the entries. It also explains
account holder's FTIN. See
Box 13i,
orientation. Withholding agents that
why the remaining boxes are not
Recipient's Foreign Taxpayer Identifying
furnish a substitute Form 1042-S (Copy
required to be completed.
Number, later.
B, C, or D) to the recipient must furnish
Appendix D
has been added. It
a separate substitute Form 1042-S for
Reminders
provides a comprehensive example of
each type of payment of income (as
how to complete Form 1042-S for
determined by the income code in Box
Foreign Account Tax Compliance
gambling winnings made directly to an
1). Withholding agents are no longer
Act (FATCA). Beginning in 2014, the
individual.
permitted to combine all payments of
Form 1042-S was modified to
income on a single substitute Form
accommodate reporting of payments
Changes to withholding rates. For
tax years beginning after December 31,
and amounts withheld under the
Mar 07, 2018
Cat. No. 64278A

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