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Amounts Not Subject to Reporting on Form 1042-S

Amounts NOT subject to withholding under chapter 3:

  • Portfolio interest paid on obligations that meet certain requirements.
  • Bank deposit interest that is not effectively connected with the conduct of a U.S. trade or business.
  • Original issue discount on certain short- term obligations.
  • Nonbusiness gambling income of a nonresident alien playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States.
  • Amounts paid as part of the purchase price of an obligation sold between interest payment dates.
  • Original issue discount paid on the sale of an obligation other than a redemption.
  • Insurance premiums paid on a contract issued by a foreign insurer.

Amounts NOT subject to withholding under chapter 4:

  • Interest or original issue discount from a short-term obligation.
  • Payments of U.S. source FDAP income made prior to January 1, 2017, with respect to an offshore obligation.
  • Payments made prior to January 1, 2017, by a secured party with respect to collateral that secures certain transactions under certain collateral arrangements.
  • Withholdable payments made prior to July 1, 2016, with respect to a preexisting obligation for which a withholding agent does not have documentation indicating that the payee is a nonparticipating FFI.
  • Payments made under a grandfathered obligation (e.g., obligations outstanding on July 1, 2014).

For details on the types of income that are NOT subject to withholding and reporting, refer to the “Income Subject to Withholding” section of Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.


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Page Last Reviewed or Updated: 10-Nov-2015