Discussion of Form 1042, Form 1042-S and Form 1042-T
Use Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, to report tax withheld on certain income of foreign persons, including nonresident aliens, foreign partnerships, foreign corporations, foreign estates, and foreign trusts. Form 1042 is a calendar year tax return. There are no provisions for filing a fiscal-year form. Form 1042 could be filed separately and does not have to be accompanied by Form 1042-T.
Use Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, to report payments made to foreign persons, including nonresident aliens, foreign partnerships, foreign corporations, foreign estates, and foreign trusts. Caution! Carefully review the Instructions for Form 1042-S and ensure that the proper Form 1042-S is used for income paid during that year. For example, the 2015 Form 1042-S must be used to report income paid in 2015.
Use Form 1042-T, Annual Summary and Transmittal of Forms 1042-S, to transmit paper Forms 1042-S to the Internal Revenue Service. Use a separate Form 1042-T to transmit each type of Form 1042-S.
Foreign Account Tax Compliance Act (FATCA). The Form 1042, Form 1042-S and Form 1042-T were modified in 2014 primarily for withholding agents to report payments and amounts withheld under the provisions commonly known as FATCA (or Chapter 4 of the Internal Revenue Code), in addition to those payments and amounts required to be reported under Chapter 3 of the Internal Revenue Code.
The Forms 1042, 1042-S and 1042-T must be filed by March 15 of the year following the calendar year in which the income subject to reporting was paid. If March 15 falls on a Saturday, Sunday, or legal holiday, the due date is the next business day.
Who Must File
Every withholding agent or intermediary, whether U.S. or foreign, who has control, receipt, custody, disposal or payment of any fixed or determinable, annual or periodic U.S. source income must file.
File only one Form 1042 consolidating all Form 1042-S recipient information, regardless of the number of different clients, branches, divisions, or types of income for which you are the withholding agent.
Do not attach paper Forms 1042-S with your Form 1042. Form 1042 could be filed separately and does not have to be accompanied by Form 1042-T with attached paper Form(s) 1042-S.
Where to File
You must file these forms with the:
Ogden Service Center
P.O. BOX 409101
Ogden, UT 84409
You must use Form 1042-T to transmit paper Forms 1042-S. Use a separate Form 1042-T to transmit each type of Form 1042-S. If you have 250 or more Forms 1042-S to file, follow the instructions under Electronic Reporting.
Reporting Agent Authorization
Extension of Time to File
You may request an extension of time to file Form 1042 by filing Form 7004, Application for Extension of Time to File Certain Excise, Income, Information, and Other Returns. Form 7004 does not extend the time for payment of tax. A separate extension Form 8809, Application for Extension of Time to File Information Returns, is used to request an extension of time to file Forms 1042-S.
Note: If you are an electronic media transmitter requesting extensions of time to file for more than 50 withholding agents or payers, you must submit the extension requests electronically. See Publication 1187, Specifications for Electronic Filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, for more information. You may also call the Martinsburg Computing Center Information Reporting Program at 866-455-7438 (toll-free) or 304-263-8700 (not a toll-free number) Monday through Friday from 8:30 a.m. to 4:30 p.m. Eastern time. The Martinsburg Computing Center Information Reporting Program may also be reached by email at firstname.lastname@example.org or by fax at 304-264-5602 (not a toll-free number). This call site does not answer tax law questions concerning the requirements for withholding of tax on payments of U.S. source income to foreign persons.
Interest and Penalties
If you file Form 1042 and/or Form 1042-S late, or fail to pay or deposit the tax when due, you may be liable for penalties and interest unless you can show that the failure to file or pay was due to reasonable cause and not willful neglect. For more information refer to the instructions attached to Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.
Refer to the Instructions for Forms 1042, 1042-S and 1042-T, and Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities, for more details.