What is Form 1042-S and Who Needs to Submit One?
Foreign workers and students who are considered non-resident aliens and are working in the United States are subject to tax withholding. IRS Form 1042-S is an annual information return for any monetary amounts given to a non-resident alien by a United States based institution or business.
The IRS says that any withholding agent (such as an employer, business, or university) that paid any amount subject to withholding (as described on Form 1042-S on page 4) to a non-resident alien would need to submit a 1042-S information return for every payment recipient.
Some of the payments which are required to be reported on Form 1042-S include but are not limited to: corporate distributions, interest, rents, royalties, compensation for dependent and independent services, pensions and other deferred income, and most gambling winnings.
Some payments are not subject to withholding such as scholarships used for tuition, expense, books, and fees for universities. Also, any service payment that was performed in the person’s country of origin is not subject to withholding. However, these payments are still required to be reported on a 1042-S form. There are more circumstances that are detailed on page 4 of Form 1042-S.
For non-resident alien employees, the form’s purpose is somewhat similar to the W-2 form that employees who are American citizens receive from their employers. The withholding agent files the 1042-S form with the IRS and sends a copy to the payee for information purposes. However, employment earnings are not the only transaction that the form covers.
Non-resident aliens have different laws that regulate tax withholdings than resident aliens. It is important that employers, businesses, universities, and anyone who pays foreign nationals any type of payment to know the resident status of their payees. For tax purposes, resident aliens are treated the same as U.S. citizens.
A non-resident alien can briefly be described as any person who is not a citizen or resident of the United States. If an alien meets the “green card test” or the “substantial presence test” for the calendar year, they are considered a resident alien. If any alien does not meet either one of those tests, they are considered an alien.
It should be noted that any amounts paid to residents of a U.S. possession or territory are not required to be reported on Form 1042-S as long as the payee is a U.S. citizen, resident alien, or U.S. national.
Some of people who would receive a 1042-S form from a withholding agent include students and postdoctoral fellows at American universities who are considered non-resident aliens, and employees at any business who are non-resident aliens under a tax treaty.
A tax treaty between the United States and the foreign national working in the United States may override U.S. income tax laws. Since each scenario is different due to tax treaties, a foreign national should consult an accountant or their employer on whether or not taxes should be withheld from the transaction amount.
Regardless of whether or not taxes are withheld from the transaction amount, any withholding agent that pays an amount of money to a non-resident alien in the U.S. is still required to file a 1042-S form.
by 
Erich J. Ruth
Erich J. Ruth provides technical support for National Software which is the parent company for 1099FIRE. 1099FIRE develops and markets a comprehensive range of products that enables any size of business or institution to effectively manage and comply with year-end filing requirements. 1099FIRE is an employee-owned company located in Phoenix, Arizona.
If you have any questions or comments about our software, feel free to contact us at any time.
I am a non –Us Citizen, live in Australia, published an eBook on amazon in July 2014 and now received 1042-s form, from Amazon, and information is as follow:
Income code: 12
Gross income: 0.32
Federal tax withheld: 0.02
Total withholding: 0.02
Shall I do any action, shall I fill tax report file to IRS, or is at just for my information, as you know this is so small amount and I don’t want any money from withholding but I heard I should fill some tax report because my income is more than a dollar( based on Australia tax report ) and I can’t afford to pay accountant for this small amount. Many thanks in advanced.
When the payer, here Amazon, electronically files with the IRS, they can only efile whole numbers.
They cant efile $0.32; so either they rounded down to $0 or rounded up to $1 for Gross Income. The
tax withheld was 0.02 and Im guessing they rounded down to $0 for that. The point is, they withheld $0.02
(or rounded down to $0) and sent that withheld money to the IRS. You may have the option to use that withholding
credit (which is Box 10 on Form 1042-S), but its such a small amount that the Copy B you received in the mail is
just for informational purposes.
If you did file 1040-NR (where NR stands for non-resident), there is a box on that form that asks if you want to
apply the 1042-S Withholding Credit (which is Box 10 on 1042-S). If you owed money to the IRS, that which was withheld
from you can be applied toward the tax due to the IRS.
@Erich J. Ruth
Thank you so much for your wise reply .
I didn’t file 1042Nr, i don’t want to apply for withholding ,is it compulsory to fill 1042 Nr , or is it optional for this small amount of income. should i fill any other form for tax purpose? sorry if i ask many silly questions 🙂
I am a USA citizen living in the Philippines with my Filipina spouse [Never been to the USA] which has an ITIN number and I opened a bank account for her in the USA in 2014.
For taxes I file “married filing jointly” and she received a 1042-S this year from that bank.
It shows “income code”=Deposit Interest
“Gross income”=$300
with box 3a “Exemption code 02″=Exempt under IRC (other than portfolio interest)
Is she exempt from paying taxes on the interest she made or should it be reported along with my interest on my 1040 Schedule B “interest & ordinary dividends”?
Thank You
> Is she exempt from paying taxes on the interest she made or should it be reported
> along with my interest on my 1040 Schedule B “interest & ordinary dividends”
I honestly dont know the answer to this question. The purpose of Form 1042-S is to
show a withholding credit. How much money is in Box 10, Total Withholding Credit? If its
$0, then Form 1042-S is really for informational purposes. If its > $0, then you can apply
that withholding credit on Form 1040-NR (where NR stands for non-resident) and the withholding
credit will reduce the amount of taxes owed.
Whether your wife owes taxes or is exempt from paying taxes is something you want to ask
a local accountant.
Its optional. Consider this, the IRS withholds around 30%. The state of California is the
first state to apply an additional 7% withholding. So if you do business in California with
someone who doesnt have a valid SSN, that business must withhold 30% and send that to the IRS
and 7% to the Franchise Tax Board in California. We all know 7% of a small amount of withheld
money is just alittle cash. And most people dont fill out the paperwork to get that 7% withheld.
The state politicians know this as well; they know its more work for you to fill out more forms
to get this small amount of withheld money and so its bonus money for the state.
I read that the state of Illinois was considering this additional withholding as well.
Yes box 10 is 0. I want to file “married filing jointly” so I can claim my spouse as a dependent to reduce my taxes.
So she would not file 1040-NR and from pub 519, it states that we can make a declaration that she is treated as a “resident alien” and claim the interest along with mine on 1040 schd B “Interest & dividends”.
I don’t know what “other than portfolio interest” is?
This would be the safe bet I believe since claiming the $300 doesn’t even change my refund!
It also states that she would have to claim worldwide income, [but she has no other income], and be subject to social security and medicare, but that doesn’t apply since its not earned income/wages but interest.
I called the IRS today, but their help desk shuts down 15 Apr, and only adjustments & refunds will be addressed due to budget cuts.
Since we are overseas are deadline to file is 15 June, but help is shutdown for all.
Going to talk to an overseas guy that does taxes for people here & see what he says, if a cover letter is even needed…
Do we have to submit a 1042 form for all vendors that completed a W-8 form? Thanks
Form W-8 is Certificate of Foreign Status. If a US business pays a non-US resident money for services, then
the US business is supposed to withhold money and send that money to the IRS and issue a 1042-S form.
This link here
https://www.1099fire.com/software/1042s.htm
has software and/or outsourcing options where they can efile your 1042-S data on your behalf.
Hello
I’m a non US citizen or US resident but i possess a US bank account and i received 3 copies of form 1042-s from my bank. The gross income is just for interests paid in 2014 for 200 dollars, with exception code 02 for box3a and 15 for box 4a.Tax rate is 0 in both boxes 3b and 4b. Total withholding credit is empty. I understand that copy B is for me, but what do i do with copies C and D ? Are they also for information purposes (as i dont have to pay any federal or state income tax) ?
Thanks!
If total withholding credit, which is Box 10, is 0, then this is just for informational purposes.
If the withholding credit was greater than 0, then you can apply that credit on Form 1040-NR where
NR means non-resident.
Hi,
my wife, who works in a multinational software company in Spain, has sold some shares the company gave her some time ago. She has received a 2014 Form 1042-S (Consolidated), and we do not know if we have to do something with it, or if some taxes have to be paid or if it is only form information purposes.
The figures are:
Box 3: Chapter 3
Box 1: 06
Box 2: 473.64
Box 3b: 0.15
Box 4a: 15
Box 7: 71.02
Box 10: 71.02
We don’t know if the Withholding Agent has payed the taxes and this is only info for us or if we should pay somothing and how to do it.
We will really appreciate some light about this issue, as we know nothing about US Taxes.
Thanks in advance
The key figure is Box 10, Total Withholding Credit. You had $71.02 withheld. The IRS rounds to whole
numbers. So $71 was withheld.
That $71 is your money. Its a withholding credit. Do you want it and do you want to pursue that credit?
That is the purpose of Form 1042-S. The payer is letting you know that they withheld money and sent that
money to the IRS. If you fill out Form 1040-NR where NR stands for non-resident, there is a box on that
form that says “1042-S Total Withholding Credit”. On that box, you would enter $71 and submit and you
get the $71. If you do nothing with Form 1042-S, then the IRS keeps that $71. Its a money maker for the
IRS.
As a side note, the state of California was the first state to start withholding 7% on top of the 30% federal
withholding. Illinois is considering this type of state withholding as well.
hi, i worked with a work visa for all 2014 and received a w-2 with my wages and withholding and also a 1042 s
income code 16
net income 14400
federal tax withheld 4320
tax rate 30
turbotax did my taxes (not online) and filed a 1040EZ with only my W2 information and i never received my refund. do i need to file an amended return including the information on my 1042 s as other income?
if so, should i add both of my federal taxes withheld?
thanks!
I dont really have a great answer. If you received a W-2, that company probably showed
all income on that form. Why the same company sent a W-2 and 1042-S doesnt make
sense. You should get one form; the W-2 for US residents and 1042-S for non-US residents.
Your question is, “do i need to file an amended return including the information on my 1042 s as
other income?”. I dont know. One company should send one form.
As a side note, the 1042-S is a withholding statement. Box 10 is the Total Withholding Credit.
If Box 10 is something other than 0, you can apply that amount on Form 1040-NR where NR stands
for non-resident.
Im a Mexican whit tourist visa to can cross to US. I went to CASINO in Eagle Pass,Tx, and I win in a bingo machinne $3150.00 dlls, the casino pay to me $2250.00, and a form 1042-S whit $947.00 for Taxes,
Can I recover the taxes ????
The answer is yes and no. You don’t recover taxes ever. You might be able to apply for a credit.
Look at Box 10 on Form 1042-S. Box 10 is Total Withholding Credit. How much is in Box 10? It is $947? If so, you can
use that amount on Form 1040-NR where NR stands for Non-Resident. On Form 1040-NR is a box where you can apply Total
Withholding Credit from form 1042-S. So if you worked in the US even as a non-resident and owed taxes then the withholding
credit on Form 1042-S can be applied to reduce your tax owed.
The IRS never just sends you money. The withholding and paperwork required to apply for a credit leads many to abandon
the money. The IRS knows this is frustrating and knows you don’t want to go through all of this paperwork and they also
know that most people walk away from the money withheld.
I have been sent a 1042-S as I am an author and have book sales in the USA by the publisher. The form has very little on it only that it is Chapter 3, exemption code 00, take rate 30.00 and a figure in the Total Withholding Credit box. It then has my details, the publishers details but very little else in the rest of the form. Does this mean I have tax I can claim back from the IRS? If so how? I thought UK tax forms were complex…. I have never worked in the USA.
What is in Box 10, Total Withholding Credit? That is the most important part of that form.
I am a canadian Citizen
I have rented my condo trough the condo association
got 225$ net from rental (no 30 % hold back to the US gov.)
do I need to do IRS tax re^port or any other action
thanks
I cant provide tax advice. Form 1042-S is a US business reporting money paid to a non-US resident. Book publishers
commonly use Form 1042-S. US Businesses hire a writer from someone who is not US resident (they have no SSN). The
US business must withhold 30% of that pay and send it to the IRS. The non-US resident then has the opportunity to
get that 30% from the IRS if they live in a country that has a tax treaty with the IRS.
If someone is a non-resident alien and in receipt of a US Social Security Pension and Withholding Tax is being applied to the pension payments, can the pension recipient complete and lodge a 1042-S form to get the withholding tax stopped and/or refunded??
I have no idea.
Hello, I received a 1042_s with the BOX 10 with Total Withholding credit 401. I’m not US resident neither Citizen. I think all is related to some stock that I have for an International company. I am working in Venezuela and live also in Venezuela. Do I need to do something or the Federal tax withheld is ok? Thanks
Box 10 is Total Withholding Credit. And the US business withheld $401. Thats your money. 33% of your money went
to the IRS because you are a non-US resident. You can use that withholding credit on the 1040-NR where NR is non-resident.
On 1040-NR is a box that asks for Total Withholding Credit and there you can put the $401 and apply that credit.
If you do nothing, the IRS keeps your money. And as a side note, they know its work for you to attain this money and
they know very few chase the credit.
Hi, I’m paying alimony to my ex-wife who lives out of the country. I’m required to fill up 1042-S to report taxes withheld. As far as know, Im acting as the withholding agent (Status code 02). Do I need to apply for a EIN or it is enough with my SSN?
Thanks
According to Publication 1187, the withholding agent must have an EIN. I never heard of a person
being a withholding agent.
I’m a Canadian and non-resident of US. I worked in US for many years (1984-2004). In 2015 I withdrew $100K from my US based IRA. 15% was withheld and reported on 1040-S. I moved the $100K to a Canadian based retirement account (an RRSP, which is like an IRA).
In 2015, I also started receiving US SS benefits. No US taxes are being withheld on my monthly SS checks. The SS benefit I get was reduced because I am also receiving Canadian SS. So the IRS knows my Canadian citizen and residence status.
Question: Can I recover that 15% withholding on the 100K?
Do I have to file a US tax return? And pay the full US tax on the $100K, which would be a lot more than 15%.
What are the implications if I do not file a US tax return? ie just forfeit the 15% because its way better than paying the full tax.
Thanks!
Hi,
I was initially on F1 visa from Jan-Oct. I got married to US citizen in April and received green card in Oct last week. How should I be filing my taxes as I have a W2 and 1042-S.
Thanks
For the 1042-S, look at Box 10 which is Total Withholding Credit. If Box 10 is $0, then nothing
was withheld and your 1042-S form means nothing (its just an information return). If Box 10 is
something bigger than $0, on Form 1040-NR there is box where you can type in what that withholding
credit is. So if you owe tax to the IRS, that withholding credit reduces the tax you owe.
We utilize the services of an expert who lives in Canada. He currently has a US visa and tax ID. Do we issue a 1099 or 1042 S. We do not withhold anything for faxes. Is that reqired?
Is he a US citizen living in Canada? A US Citizen receives a 1099 no matter where they live.
If the expert is a non-US citizen, then he gets a 1042-S.
I am a non-resident/non-US citizen and after my 5th calendar year in the US ( 4 years undergraduate degree plus work thereafter) I’m being taxed as a resident. I have, however, received a 1042-S due to my scholarship and a W-2 from student employment that I had during my final semester in school (spring 2015). I have also received a W-2 from my work (2 W-2’s in total). I had previously used Glacier Tax Prep for my 1040NR-EZ tax return filings, however, in using TurboTax this year, I was switched to the 1040 EZ form which does not have a provision for my 1042-S. How would I go about filing this?
P.S. Line 10 of the 1042-S is more than $0 but I’m a resident for tax purposes and cannot file 1040NR.
> P.S. Line 10 of the 1042-S is more than $0 but I’m a resident for tax purposes and cannot file 1040NR.
There is nothing you can do. At least not to my knowledge. There is a box on Form 1040-NR where NR stands
for non-resident to enter the Total Withholding Credit which is Box 10. You then receive a credit toward
tax to be paid to the IRS. There is not an option on Form 1040 for US residents.
The IRS knows the 1042-S forms are a hassle. How much is in Box 10 and how much time and energy do you want
to spend to attain that withholding credit?
Hello, I am an international student at US. I worked on campus, so I filed the W2 and the 1098-T in turbotax and I already got my tax refund! However I also received the 1042-s, and the number in box 10 is greater than 0. Is there any chance I can get this money? Considering that I already filled other forms.
Thank you
Did you file Form 1040-NR where NR stands for non-resident? That is the form where you can claim
the withholding credit.
If yes, how could I do that? Form 1040NR?
I am a retired US citizen residing abroad with my NRA spouse. We live and file taxes based on our non-US address and have no residence in the US. We have been filing 1040 joint returns on our world wide income for the last 40 years. I made the one time “election” to file joint the year we were married. Since retirement, our income consists of retirement account distributions, interest and dividends and investment gains from joint bank and investment accounts, (which provide 1099’s at the end of each year), and Social Security benefits.
We are both receiving SS benefits. My spouse receives spousal benefits based on my work record and retirement benefit. For 2015 I have received a SSA-1099 for benefits paid to me including some unpaid benefits for prior years. My NRA spouse has received a SSA-1042-S for benefits paid to her including prior years. Box 7 of the SSA-1042S contains a withholding amount of $3,810. I assume this is the 30% withholding tax on 85% of her benefits.
Now, to file our 2015 1040 joint return, I am assuming that I must include both our SS benefits on 1040 line 20a, as well as claim all withholding, including the 1042-S amount, on line 64, Federal Income tax withheld. But the 1040 instructions for line 64 only mention W-2’s, !099’s and other forms as supporting documents, with no mention of the 1042-S.
Am I correct that must report my spouse’s SS benefit as income on our joint return as well as apply the 1042-S withholding to the tax calculation?
Thank You.
If you look at Form 1040-NR where NR stands for non-resident, there is a box on that
form that asks about Box 10 – Total Withholding Credit from Form 1042-S. There the non-US
resident can put in the withholding credit which will reduce the amount of taxes they owe the
IRS.
With that said, you are a US resident and your spouse is as well. Your spouse shouldnt have
received Form 1042-S. Businesses get confused when someone has a non-US mailing address. They
think the 1042-S applies in these cases. If you are a US resident who is not living in the United
States right now, you still should get a 1099. And if you have a valid SSN, the business should not
have withheld. A business is supposed to withhold if you dont have a valid SSN.
It seems complicated. The SSA-1099 issued to me and the SSA-1042-S issued to my spouse are directly from the Social Security Administration, not just any business. Because I am a US citizen SSA automatically issues me a 1099 for benefits paid. My spouse is not a US resident (no green card, but she has a SSN) and lives overseas so she apparently is classified a non-resident alien NRA for SS purposes and was therefore issued a 1042-S.
However, as we elected to file joint returns years ago, the IRS treats my spouse as a resident alien for tax purposes. That meant she implicitly agreed to be taxed on her worldwide income. Our total income is included in our 1040 each year.
If I cannot easily claim the 1042-S withholding on our joint return as hoped I guess one option would be to file separately, a 1040 for me and 1040-NR for my spouse, splitting our income and paying single rather than married-filing-jointly rates. The issue with that is that the election we made to file jointly can only be changed once and cannot be reinstated, ever.
I think I will need to seek tax advice to understand the implications of making a major change in my tax filing, if that is indeed required.
Thank You.
If I meets the “substantial presence test” for the calendar year which is more than 6 months.Should I receive the 1099 rather than 1062-s? But I received 1062-s from bank and they still thought they gave me the right form.They also told me they can’t change it into 1099. Should I still fill the 1099 ?What should I do?
Thank You!!
Thank You!!
Thank You!!
Im not sure what the substantial presence test is or means. If you are a US citizen with a SSN, then you get a 1099 form
even if you live outside the United States. If you file a 1040, then you get a 1099.
If you are a non-US resident and possibly file a 1040-NR, you get a 1042-S. Form 1040-NR where NR stands for non-resident
has a box that asks for the Total Withholding Credit from the 1042-S. On that 1040-NR form, you have the opportunity to claim
your credit. You don’t have an opportunity to claim a withholding credit on Form 1040.
I am resident alien with a SSN and I file a 1040.Does it mean I should fill 1099 though the bank gave me 1042s ? Should I explain why it doesn’t match the bank form?
Thank you again!!!!
If you have a SSN, you get a 1099. If you dont have a SSN, the withholding agent is supposed to withhold 30% and send that to the IRS.
If you file a 1040, then the withholding credit (Box 10) on the 1042-S does nothing for you. You can only claim the credit if you file a 1040-NR. So yes, I would talk to the withholding agent.
I have talked to the chase three times.They said they couldn’t fix it.
It drove me crazy.
Thank you! ^^
Hi, I am a resident alien for tax purposes and apart from W-2, I also received 1042-S, 1099. Why did I receive 1042-S (income code 06, box # 10 is >0), since I am a resident alien? What should I do with 1042-S?
Do you submit Form 1040-NR (where NR stands for non-resident) or do you submit a 1040?
On Form 1040-NR, there is a box where you can include the Total Withholding Credit (which is
Box 10 on Form 1042-S). If you submit 1040-NR, you can claim that credit.
I submit form 1040. In that case where should I report form 1042-S? Thank you.
I am a foreign citizen who did a Fellowship funded by a USA organization in 2015. I have been sent a 1042-S which states I got $6,000 withheld. I don’t want to ask for a return on that money. Do I have to do anything?
$6000 was withheld and you “dont want to ask for a return on that money”? If you do nothing, the IRS keeps that $6,000.