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Multiple Withholding Agent Rule

A withholding agent is not required to file Form 1042-S if a return is filed by another withholding agent reporting the same amount to the same recipient (the multiple withholding agent rule). If an Nonqualified Intermediary (NQI) or flow-through entity has provided another withholding agent with the appropriate documentation and complete withholding statement, including information allocating the payment to each recipient, the NQI or flow-through entity may presume that the other withholding agent filed the required Forms 1042-S unless the NQI or flow-through entity knows, or has reason to know, that the required Form 1042-S reporting has not been done.

The multiple withholding agent rule does not relieve withholding agents from Form 1042-S reporting responsibility in the following circumstances.

  • Any withholding agent making a payment to a Qualified Intermediary (QI), Withholding Foreign Partnership (WP), or Withholding Foreign Trust (WT) must report that payment as made to the QI, WP, or WT.
  • Any U.S. withholding agent making a payment to an authorized foreign agent must report that payment to the authorized foreign agent.
  • Any withholding agent making a payment to a U.S. branch treated as a U.S. person must report the payment as made to that branch.
  • Any withholding agent making a payment to a flow-through entity must report the payment as made to a beneficial owner, QI, WP, or WT that has a direct or indirect interest in that entity.
  • Any withholding agent that withholds an amount from a payment under Chapter 3 of the Code must report that amount to the recipient from whom it was withheld, unless the payment is reportable on another IRS form.
  • Any QI, WP, or WT required to report an amount to a withholding rate pool, and
  • An NQI or flow-through entity that has not transmitted a valid Form W-8 or other valid documentation to another withholding agent together with the required withholding statement.

References/Related Topics

Page Last Reviewed or Updated: 14-Nov-2014