Form 1042-S is a tax form used by the United States Internal Revenue Service (IRS) to report payments made to non-resident aliens for income subject to withholding. It is also known as the Foreign Person’s U.S. Source Income Subject to Withholding form.

Form 1042-S is typically issued by withholding agents, such as employers or financial institutions. It provides information about wages, scholarships, fellowships, grants, and other types of income paid to non-resident aliens. Both the payer and the recipient must accurately report this information to comply with tax laws and regulations.

Why is Form 1042-S important?

Form 1042-S is an essential document for non-resident aliens as it helps them determine their tax liability and eligibility for tax benefits, exemptions, or deductions. It also serves as proof of income for non-resident aliens to file their tax returns in their home country.

For the payer, Form 1042-S is essential for reporting and tracking payments made to non-resident aliens and ensuring compliance with tax laws. Failure to report these payments accurately can result in penalties and legal consequences.

How is Form 1042-S different from Form 1099?

Form 1042-S and Form 1099 differ in purpose, recipients, types of income reported, tax withholding requirements, and reporting obligations. Form 1042-S specifically pertains to income paid to foreign persons or entities subject to U.S. tax withholding, while Form 1099 reports income paid to U.S. persons or entities.

The table below highlights the key differences between the two. 

Form 1042-SForm 1099
RecipientsReports income paid to foreign persons or entities, including nonresident aliens, subject to withholding under U.S. tax laws.Reports various types of income paid to U.S. persons or entities, including individuals, corporations, partnerships, and trusts.
Types of IncomeTypically reports income such as wages, salaries, scholarships, grants, dividends, interest, and other income paid to foreign persons or entities.Reports a wide range of income, including interest, dividends, royalties, rental income, capital gains, and other types of income paid to U.S. persons or entities.
Tax WithholdingReports income subject to withholding under U.S. tax laws, such as income paid to foreign persons or entities subject to withholding tax.Generally does not involve tax withholding. But, certain types of income reported on Form 1099 may be subject to backup withholding if the recipient fails to provide a taxpayer identification number (TIN) or if the IRS notifies the payer to withhold.
Reporting RequirementsUsed by withholding agents, such as employers or financial institutions, to report income paid to foreign persons or entities subject to withholding under the Internal Revenue Code.Used by payers, including businesses, financial institutions, and government agencies, to report various types of income paid to U.S. persons or entities.

How to file Form 1042-S

You can file Form 1042-S electronically through the IRS’s FIRE (Filing Information Returns Electronically) system. Payers with more than 250 forms must file electronically, while those with less than 250 forms can file on paper. 

Here’s the easiest way to file Form 1042-S

  1. Download it from the IRS website or ask the IRS for a copy.
  2. Collect all the necessary info, like names, addresses, and amounts paid.
  3. Complete the form carefully, following the IRS instructions.
  4. Double-check all information for accuracy and completeness. 
  5. File the form with the IRS by the deadline.
  6. Give copies to the people you paid.
  7. Keep copies of the form for your records.

It is important to note that you must file Form 1042-S by March 15th of the year following the tax year in which the payments were made. Failure to file on time can result in penalties and interest charges.

Where to get Form 1042-S

You can get Form 1042-S from several sources:

  • IRS Website: Download the form directly from the IRS website at IRS.gov/forms-instructions.
  • Tax Preparation Software: Tax preparation software may provide Form 1042-S for you to fill out and file electronically.
  • Tax Professionals: Tax professionals such as accountants or tax preparers can provide you with the form and assist you in completing and filing it.
  • IRS Office: You can pick up a copy of the form in person at an IRS Taxpayer Assistance Center.
  • Request by Mail: The IRS will mail Form 1042-S to you if you request it. Call the IRS forms hotline at 1-800-829-3676 to request the form.

Be sure you get the most current version of Form 1042-S for the tax year you are filing.

If you are a non-resident alien and haven’t received Form 1042-S from your payer, you should contact them to ensure they have filed it correctly. If you don’t receive your form by March  15th, you can request an extension from the IRS.

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