Electronic Reporting of Forms 1042-S


On February 21, 2023, the Department of the Treasury and the Internal Revenue Service issued final regulations for the Taxpayer First Act. Treasury Decision (TD) 9972 amended the rules for filing returns and other documents electronically (e-file). These regulations reduced the 250-return threshold to generally require electronic filing by filers of 10 or more returns in a calendar year beginning in 2024, tax year 2023.

Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, must also be filed electronically if the withholding agent is a partnership that has more than 100 partners. Financial institutions that are required to report payments made under Chapter 3 or 4 must electronically file Forms 1042-S (regardless of the number of forms to be filed).

For tax year 2022, the number of returns remains at 250.

Note: All filers are encouraged to file information returns electronically even if they are not required to do so.

The final regulations require filers to aggregate almost all information return types covered by the regulation that are required to be filed during the calendar year to determine whether a filer meets the 10-return threshold and is required to e-file their information returns. Earlier regulations applied the 250-return threshold separately to each type of information return covered by the regulations.

Corrected information returns are not counted when calculating the aggregate to determine if you are required to file electronically.

As part of the threshold reduction, corrected information returns MUST be filed electronically if the original return was submitted electronically.

Electronic submissions are filed using the Filing Information Returns Electronically (FIRE) System.

For more information about the regulations and the reduced threshold to electronically file, refer to IRS and Treasury final regulations on e-file and the Filing Information Returns Electronically (FIRE) webpages.

Caution! If you file electronically, do not file the same returns on paper. Duplicate filing may cause penalty notices to be generated.

Failure to File Electronically

If you are required to file Form 1042-S electronically but you fail to do so, and you do not have an approved waiver on record, you will be subject to a penalty unless you establish reasonable cause for your failure. The penalty applies separately to original and amended returns.

Note: Refer to the Increase in Information Return Penalties page for the inflation-adjusted penalty amounts.

Hardship Waiver

To request a hardship waiver from the required filing of Forms 1042-S electronically, submit Form 8508, Request for Waiver From Filing Information Returns Electronically PDF. Waiver requests should be filed at least 45 days before the due date of the returns. See Form 8508 for more information.

Need Assistance?

For Assistance with Electronic Filing

For additional information and instructions on filing Forms 1042-S electronically, extensions of time to file Form 8809, Application for Extension of Time to File Information Returns, and Hardship Waivers (Form 8508), see Publication 1187, Specifications for Electronic Filing of Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding PDF.

For Assistance with Tax Law Questions

For assistance with tax law questions concerning withholding of tax on payments of U.S. sourced income to foreign persons under Chapter 3 of the Internal Revenue Code, you may call 267-941-1000 (not a toll-free number) from 6 a.m. to 11 p.m. Eastern time or write to:

Internal Revenue Service
International Section
Philadelphia, PA 19255-0725

References/Related Topics