2023 Form 1042-S - Foreign Person Us Source Income Subject To Withholding

Form 1042-S is a United States federal income tax form that foreign entities are required to complete if they pay income to non-resident alien individuals or U.S. controllable foreign corporations (CFCs). This form serves as the official notification of foreign income payments and, as such, the primary function of the 1042-S is to help ensure that foreign income is properly reported and taxed.

Information Reported on Form 1042-S

Form 1042-S requires the reporting of various details about the income paid to foreign persons, including the:

  • Type of income (e.g., interest, dividends, rents, royalties)
  • Gross amount of the income
  • Amount of U.S. federal income tax withheld
  • Recipient's name, address, and taxpayer identification number
  • Withholding agent's name, address, and taxpayer identification number

This information helps the IRS track and verify the proper reporting and payment of U.S. federal income taxes on foreign-sourced income.

Who Must File Form 1042-S?

Any U.S. withholding agent, such as a financial institution, payer of U.S. source income, or other entity, must file Form 1042-S if they have made payments to a foreign person that are subject to U.S. federal income tax withholding. This includes payments for interest, dividends, rents, royalties, compensations, and other types of income.

Additionally, foreign persons who have received U.S. source income subject to withholding may need to file Form 1042-S if they are claiming a reduced rate of withholding or a refund of taxes withheld.

For the current year's Form 1042-S, click here.