Form 1042 Annual Withholding Tax Return for U.S. Source Income of

2008 Form 1042,
Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
Purpose:

This is the first circulated draft of the 2008 Form 1042 for your review and
comments. See below for a discussion of the major changes.

TPCC Meeting:

None, but one may be arranged if requested.

Prior Version:

The 2007 Form 1042 is available at:
http://www.irs.gov/pub/irs-pdf/f1042.pdf

Other Products:

Circulations of draft tax forms, instructions, notices, and publications are
posted at: http://taxforms.web.irs.gov/Circulations/index.htm

Comments:

Please email, fax, call, or mail any comments by June 13, 2008.

Phil Parisi
Tax Forms & Publications
SE:W:CAR:MP:T:I:S
Email: [email protected]
Phone: 202-622-3297
Fax: 202-622-5015

Major Changes:
The dates for making tax deposits and filing returns have been updated.
All references to Magnetic Media have been deleted. Returns on magnetic media will not
be accepted for tax year 2008 forms filed in calendar year 2009.

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TLS, have you
transmitted all R
text files for this
cycle update?

I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 1042, PAGE 1 of 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 432mm (17") x 279mm (11") FOLD TO: 203mm (8") x 279mm (11")
PERFORATE: ON THE FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Date

Form

1042

Action

Date

O.K. to print
Revised proofs
requested

Annual Withholding Tax Return for
U.S. Source Income of Foreign Persons

Department of the Treasury
Internal Revenue Service (77)

Name of withholding agent

OMB No. 1545-0096

2008

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©

If this is an amended return, check here

Signature

See instructions.

CC
RD
CAF
CR
EDC

Number, street, and room or suite no. (if a P.O. box, see instructions)

City or town, province or state, and country (including postal code)

©

For IRS Use Only

Employer identification number

FD
FF
FP
I
SIC

If you will not be liable for returns in the future, check here ©
Enter date final income paid ©
Check here if you made quarter-monthly deposits using the 90% rule (see Deposit Requirements in the instructions)
Check if you are a:
QI/Withholding foreign partnership or trust
NQI/Flow-through entity
(See instructions.)

©

Record of Federal Tax Liability (Do not show federal tax deposits here.)
Line
No.

Period
ending

Tax liability for period
(including any taxes assumed Line
No.
on Form(s) 1000)

Period
ending

Tax liability for period
(including any taxes assumed Line
No.
on Form(s) 1000)

1
7
21
7
2
15
22
15
Jan.
May
3
22
23
22
4
31
24
31
Jan.
total
May
total
5
25
6
7
26
7
7
15
27
15
June
Feb. 22
8
28
22
9
29
29
30
10 Feb. total
30 June total
11
7
31
7
12
15
32
15
July
Mar.
13
22
33
22
14
31
34
31
15 Mar. total
35 July total
16
7
36
7
17
15
37
15
Apr.
Aug.
18
22
38
22
19
30
39
31
20 Apr. total
40 Aug. total
61 No. of Forms 1042-S filed: a On paper
62 For all Form(s) 1042-S and 1000: a Gross income paid
63a
b
c
64
65
66
67
68
69
70
71

Period
ending

41
7
42
15
Sept.
43
22
44
30
Sept.
total
45
46
7
47
15
Oct.
48
22
49
31
50 Oct. total
51
7
52
15
Nov.
53
22
54
30
55 Nov. total
56
7
57
15
Dec.
58
22
59
31
60 Dec. total
b Electronically
b Taxes withheld or assumed

63a
Total tax liability (add monthly total lines from above)
63b
Adjustments (see page 4)
Total net tax liability (combine lines 63a and 63b)
Total paid by federal tax deposit coupons or by electronic funds
64
transfer (or with a request for an extension of time to file) for 2008
65
Enter overpayment applied as a credit from 2007 Form 1042
66
Credit for amounts withheld by other withholding agents (see page 4)
Total payments. Add lines 64 through 66
If line 63c is larger than line 67, enter balance due here
If line 67 is larger than line 63c, enter overpayment here
Penalty for failure to deposit tax when due. Also include on line 68 or line 69 (see page 4)
Apply overpayment on line 69 to (check one):
Credit on 2009 Form 1042 or
Refund

Third Party
Designee

Sign
Here
Paid
Preparer’s
Use Only

Tax liability for period
(including any taxes assumed
on Form(s) 1000)

Do you want to allow another person to discuss this return with the IRS (see page 4)?

©

63c

©

67
68
69
70

Yes. Complete the following.

No

Designee’s
Phone
Personal identification
©
©
©
name
no.
number (PIN)
Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and
belief, it is true, correct, and complete. Declaration of preparer (other than withholding agent) is based on all information of which preparer has any knowledge.
Capacity in which acting ©
Date
Your
Daytime phone number ©
signature
Preparer’s
signature

©
©

Firm’s name (or
yours if self-employed),
address, and ZIP code

Date

Check if
self-employed

Preparer’s SSN or PTIN
©

©

For Privacy Act and Paperwork Reduction Act Notice, see the instructions.

EIN

©

Phone no.
Cat. No. 11384V

Form

1042

(2008)

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 1042, PAGE 2 of 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 432mm (17") x 279mm (11") FOLD TO: 203mm (8") x 279mm (11")
PERFORATE: ON THE FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1042 (2008)

Section references are to the Internal
Revenue Code unless otherwise noted.

General Instructions
Purpose of Form
Use Form 1042 to report tax withheld on
certain income of foreign persons,
including nonresident aliens, foreign
partnerships, foreign corporations, foreign
estates, and foreign trusts.
Publicly traded partnerships (section
1446 withholding tax). For purposes of
reporting on Form 1042, a publicly traded
partnership (PTP) must withhold section
1446 tax on distributions of effectively
connected income (ECI) to its foreign
partners. A nominee that receives a
distribution of ECI from a PTP and is
treated as the withholding agent must use
Form 1042 to report the tax withheld. For
this purpose, a nominee is a domestic
person holding an interest in the PTP on
behalf of one or more foreign partners. For
more information, see Regulations section
1.1446-4 and Pub. 515, Withholding of Tax
on Nonresident Aliens and Foreign Entities.

Who Must File
Every withholding agent or intermediary
(see definitions below) who receives,
controls, has custody of, disposes of, or
pays any fixed or determinable annual or
periodical income must file an annual
return for the preceding calendar year on
Form 1042. Also, any PTP or nominee
making a distribution of ECI under section
1446 must file Form 1042 for the preceding
calendar year.
You must file Form 1042 if either of the
following apply.
● You are required to file Form(s) 1042-S
(whether or not any tax was withheld or
was required to be withheld). File Form
1042 even if you file Forms 1042-S
electronically.
● You pay gross investment income to
foreign private foundations that are subject
to tax under section 4948(a).

Withholding Agent
Any person required to withhold tax is a
withholding agent. A withholding agent
may be an individual, trust, estate,
partnership, corporation, nominee (under
section 1446), government agency,
association, or tax-exempt foundation,
whether domestic or foreign.

CAUTION

Every person required to deduct
and withhold any tax under
Chapter 3 of the Code is liable
for such tax. See section 1461.

Intermediary
An intermediary is a person who acts as a
custodian, broker, nominee, or otherwise
as an agent for another person, regardless
of whether that other person is the
beneficial owner of the amount paid, a
flow-through entity, or another
intermediary.
Qualified intermediary (QI). A QI is an
intermediary that is a party to a withholding
agreement with the IRS. An entity must

Page

indicate its status as a QI on a Form
W-8IMYsubmitted to a withholding agent.
For information on a QI withholding
agreement, see Rev. Proc. 2000-12, which
is on page 387 of Internal Revenue Bulletin
(IRB) 2000-4 at
www.irs.gov/pub/irsirbs/irb00-04.pdf. Also
see Notice 2001-4 (IRB 2001-2), as
amended; Rev. Proc. 2003-64, Appendix 3
(IRB 2003-32); Rev. Proc. 2004-21 (IRB
2004-14); and Rev. Proc. 2005-77 (IRB
2005-51).
Withholding foreign partnership (WP) or
withholding foreign trust (WT). A WP or
WT is a foreign partnership or trust that
has entered into a withholding agreement
with the IRS in which it agrees to assume
primary withholding responsibility for all
payments that are made to it for its
partners, beneficiaries, or owners. For
information on these withholding
agreements, see Rev. Proc. 2003-64,
which is on page 306 of Internal Revenue
Bulletin (IRB) 2003-32 at
www.irs.gov/pub/irsirbs/irb03-32.pdf. Also
see Rev. Proc. 2004-21 (IRB 2004-14) and
Rev. Proc. 2005-77 (IRB 2005-51).
Nonqualified intermediary (NQI). An NQI
is any intermediary that is not a U.S.
person and that is not a QI.

2

Use Schedule H (Form 1040), Household
Employment Taxes, to report income tax
withheld and social security and Medicare
taxes on wages paid to a nonresident alien
household employee.

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Where and When To File
File Form 1042 with the Ogden Service
Center, P.O. Box 409101, Ogden, UT
84409, by March 16, 2009. Use Form
1042-T to transmit paper Forms 1042-S.
Extension of time to file. If you need
more time to file Form 1042, you may
submit Form 7004, Application for
Automatic 6-Month Extension of Time To
File Certain Business Income Tax,
Information, and Other Returns.
Form 7004 does not extend the time for
payment of tax.

Additional Information
For details on withholding of tax, see Pub.
515. You can get Pub. 515 by calling
1-800-TAX-FORM (1-800-829-3676) or by
downloading it from the IRS website at
www.irs.gov.

Income Tax Withholding on
Wages, Pensions, Annuities,
and Certain Other Deferred
Income
Use Form 941, Employer’s QUARTERLY
Federal Tax Return, to report income tax
withheld and social security and Medicare
taxes on wages paid to a nonresident alien
employee.
Use Form 945, Annual Return of
Withheld Federal Income Tax, to report
income tax withheld under section 3405
from pensions, annuities, and certain other
deferred income paid to a nonresident
alien individual. However, if the recipient
has elected under section 3405(a)(2) or
(b)(2) not to have withholding under section
3405, these payments are subject to
withholding under section 1441 and the tax
withheld must be reported using Forms
1042 and 1042-S.

Deposit Requirements
Generally, if you are not required to use
the Electronic Federal Tax Payment
System (EFTPS), you must deposit the tax
withheld and required to be shown on
Form 1042 with an authorized financial
institution using your preprinted Form
8109, Federal Tax Deposit Coupon. Do not
use anyone else’s coupons. If you do not
have your coupons when a deposit is due,
call 1-800-829-4933, if you are in the
United States. If overseas, call
215-516-2000 (not a toll-free number). You
may also contact your local IRS office. To
avoid a penalty, do not mail your deposits
directly to the IRS.
The amount of tax you are required to
withhold determines the frequency of your
deposits. The following rules explain how
often deposits must be made.
1. If at the end of any quarter-monthly
period the total amount of undeposited
taxes is $2,000 or more, you must deposit
the taxes within 3 banking days after the
end of the quarter-monthly period. (A
quarter-monthly period ends on the 7th,
15th, 22nd, and last day of the month.) To
determine banking days, do not count
Saturdays, Sundays, legal holidays, or any
local holidays observed by authorized
financial institutions.
This deposit rule is considered met if:
● You deposit at least 90% of the actual
tax liability for the deposit period, and
● If the quarter-monthly period is in a
month other than December, you deposit
any underpayment with your first deposit
that is required to be made after the 15th
day of the following month. Any
underpayment of $200 or more for a
quarter-monthly period ending in
December must be deposited by
January 31.
2. If at the end of any month the total
amount of undeposited taxes is at least
$200 but less than $2,000, you must
deposit the taxes within 15 days after the
end of the month. If you make a deposit of
$2,000 or more during any month except
December under rule 1 above, carry over
any end-of-the-month balance of less than
$2,000 to the next month. If you make a
deposit of $2,000 or more during
December, any end-of-December balance
of less than $2,000 should be remitted with
your Form 1042 by March 16, 2009.
3. If at the end of a calendar year the
total amount of undeposited taxes is less
than $200, you may either pay the taxes
with your Form 1042 or deposit the entire
amount by March 16, 2009.
Note. If you are requesting an extension of
time to file using Form 7004, follow these
rules to see if you must make a deposit of
any balance due or if you can pay it with
Form 7004. See Form 7004 and its
instructions for more information.

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 1042, PAGE 3 of 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 432mm (17") x 279mm (11") FOLD TO: 203mm (8") x 279mm (11")
PERFORATE: ON THE FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1042 (2008)

Electronic deposit requirement. You
must make electronic deposits of all
depository tax liabilities using the
Electronic Federal Tax Payment System
(EFTPS) in 2009 if:
● The total deposits of such taxes in 2007
were more than $200,000, or
● You were required to use EFTPS in
2008.
If you are required to use EFTPS and fail
to do so, you may be subject to a 10%
penalty. If you are not required to use
EFTPS, you may participate voluntarily. To
enroll in or get more information about
EFTPS, call 1-800-555-4477. You can also
visit the EFTPS website at www.eftps.gov.
Depositing on time. For deposits made
by EFTPS to be on time, you must initiate
the transaction at least one business day
before the date the deposit is due.
Completing Form 8109. If you do not use
EFTPS, deposit your income tax payments
using Form 8109. In most cases, you will
fill out a Form 8109 following the
instructions in the coupon book. However,
if a deposit liability arises from a
distribution reportable on Form 1042 for
the prior year, darken the 4th quarter
space on Form 8109. If the distribution is
reportable for the current year, darken the
1st quarter space. In all cases, follow the
coupon book instructions for completing
the rest of the deposit coupon. To ensure
proper crediting, write your taxpayer
identification number, the period to which
the tax deposit applies, and “Form 1042”
on the check or money order.
If you prefer you may mail your coupon
and payment to:
Financial Agent
Federal Tax Deposit Processing
P.O. Box 970030
St. Louis, MO 63197 U.S.A.
Make your check or money order
payable to “Financial Agent.”

Interest and Penalties
If you file Form 1042 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.
You do not have to figure the
of any interest or
TIP amount
penalties you may owe. Because
figuring these amounts can be
complicated, we will do it for you if you
want. We will send you a bill for any
amount due.
If you include interest or penalties (other
than the penalty for failure to deposit tax
when due) with your payment, identify and
enter the amount in the bottom margin of
Form 1042, page 1. Do not include interest
or penalties (other than the penalty for
failure to deposit tax when due) in the
balance due on line 68.
Interest. Interest is charged on taxes not
paid by the due date, even if an extension
of time to file is granted. Interest is also
charged on penalties imposed for failure to

Page

file, negligence, fraud, and substantial
understatements of tax from the due date
(including extensions) to the date of
payment. Interest is figured at a rate
determined under section 6621.

3

Address. Include the suite, room, or other
unit number after the street address. If
your post office does not deliver mail to
the street address and you have a P.O.
box, show the box number instead of the
street address.

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Late filing of Form 1042. The penalty for
not filing Form 1042 when due (including
extensions) is 5% of the unpaid tax for
each month or part of a month the return
is late, up to a maximum of 25% of the
unpaid tax.

Late payment of tax. The penalty for not
paying tax when due is usually 1⁄ 2 of 1%
of the unpaid tax for each month or part of
a month the tax is unpaid. The penalty
cannot exceed 25% of the unpaid tax.
Failure to deposit tax when due. See the
instructions for line 70 on page 4.
Other penalties. Penalties may be
imposed for negligence, substantial
understatement of tax, and fraud. See
sections 6662 and 6663.

Specific Instructions

File only one Form 1042
consolidating all Form 1042-S
recipient information, regardless
CAUTION of the number of different
clients, branches, divisions, or types of
income for which you are the withholding
agent. However, if you are acting in more
than one capacity (for example, you are
acting as a QI for certain designated
accounts and as an NQI for other
accounts), file a separate Form 1042 for
each capacity in which you are acting.

Rounding off to whole dollars. You may
round off cents to whole dollars. If you do
round to whole dollars, you must round all
amounts. To round off amounts to the
nearest whole dollar, drop amounts under
50 cents and increase amounts from 50 to
99 cents to the next dollar. For example,
$1.39 becomes $1 and $2.50 becomes
$3. If you have to add two or more
amounts to figure the amount to enter on
a line, include cents when adding and
only round off the total.
Employer identification number (EIN).
You are generally required to enter your
EIN. However, if you are filing Form 1042 as
a QI, withholding foreign partnership, or
withholding foreign trust, enter your QI-EIN,
WP-EIN, or WT-EIN. Also, be sure to check
the “QI/Withholding foreign partnership or
trust” box. See QI and NQI checkboxes
below.
If you do not have an EIN, you can
apply for one online at
www.irs.gov/businesses or by telephone at
1-800-829-4933. Also, you can file Form
SS-4, Application for Employer
Identification Number, by fax or mail. File
amended Forms 1042-S when you receive
your EIN.
To get a QI-EIN, WP-EIN, or WT-EIN,
submit Form SS-4 with your application for
that status. Do not send an application for
a QI-EIN, WP-EIN, or WT-EIN to the
addresses listed in the Instructions for
Form SS-4.

QI and NQI checkboxes. See page 2 for
definitions of intermediary, qualified
intermediary (QI), withholding foreign
partnership (WP), withholding foreign trust
(WT), and nonqualified intermediary (NQI).
See the Form 1042-S instructions for
definitions of U.S. branch treated as a U.S.
person and flow-through entity.
Check the “QI/Withholding foreign
partnership or trust” box on page 1 if you
are a QI, WP, WT, or a U.S. branch treated
as a U.S. person. Check the
“NQI/Flow-through entity” box if you are an
NQI or a flow-through entity.
Lines 1 through 60. Except as otherwise
provided in these instructions, include tax
liability for the period in which the income
was distributed. Do not enter any negative
amounts on these lines.
A domestic partnership that has not
distributed a foreign partner’s distributive
share of income subject to withholding
under section 1441 must withhold tax on
any income not distributed by the date on
which the Schedule K-1 is sent or
otherwise furnished to the foreign partner
(or, if earlier, the due date for furnishing
Schedule K-1 to the partner). Include such
tax for the period that includes the date
the tax was required to be withheld.
Do not include on lines 1 through 60 any
tax liability attributable to adjustments of
underwithheld tax on corporate
distributions made in calendar year 2008 if:
● The distributing corporation made a
reasonable estimate of accumulated and
current earnings and profits under
Regulations section 1.1441-3(c)(2)(ii)(A) and
● The distributing corporation or
intermediary paid over the underwithheld
tax by March 16, 2009.
Instead, include these payments of
underwithheld tax on line 63b.
If you are a QI that did not assume
primary withholding responsibility, enter the
total amount withheld by the U.S.
withholding agent(s) on line 59. Report all
other amounts (that is, amounts you
actually withheld) on the line that
corresponds with the date the liability was
incurred.
If you repaid the recipient for an amount
overwithheld by reducing the amount
withheld on a later payment, report the
reduced amount on these lines. If you used
the reimbursement procedure for
overwithheld amounts, see Pub. 515.
Line 61. Enter the number of Forms
1042-S filed on paper and electronically.
Lines 62a and 62b. Enter the amounts
requested with respect to all Forms 1042-S
(regardless of whether the form was filed
electronically or on paper) and with respect
to all Forms 1000, Ownership Certificate.

2
I.R.S. SPECIFICATIONS
TO BE REMOVED BEFORE PRINTING
INSTRUCTIONS TO PRINTERS
FORM 1042, PAGE 4 of 4
MARGINS: TOP 13mm (1⁄ 2 "), CENTER SIDES.
PRINTS: HEAD TO HEAD
PAPER: WHITE, WRITING, SUB. 20.
INK: BLACK
FLAT SIZE: 432mm (17") x 279mm (11") FOLD TO: 203mm (8") x 279mm (11")
PERFORATE: ON THE FOLD
DO NOT PRINT — DO NOT PRINT — DO NOT PRINT — DO NOT PRINT

Form 1042 (2008)

Page

Be sure to reconcile amounts on
Form 1042 with amounts on
Forms 1042-S (including Forms
CAUTION 1042-S filed electronically), to
avoid unnecessary correspondence with
the IRS.
Line 62a. The amount on line 62a should
equal the sum of all amounts shown on
Forms 1042-S, box 2, and all amounts
shown as gross interest paid on Forms
1000.
Line 62b. The amount on line 62b
should equal:
● The sum of all Forms 1042-S, box 9 (box
7 plus box 8), less
● The sum of all Forms 1042-S, box 10,
plus
● The tax assumed from Forms 1000.
If it does not, attach a statement to Form
1042 explaining the difference.
Line 63a. The amount on line 63a must
equal the sum of the monthly totals as
listed on the Record of Federal Tax
Liability. Do not make any adjustments on
this line. Except for adjustments described
in the instructions for line 63b, you may
only make adjustments on the appropriate
entry line of the Record of Federal Tax
Liability.

claimed on line 66. Failure to do so will
result in the denial of the refund or credit
being claimed. If you are a PTP or a
nominee withholding under section 1446,
the tax paid for a payee may only be
claimed as a credit by the payee.
Lines 69 and 71. You may claim an
overpayment shown on line 69 as a refund
or a credit. Check the applicable box on
line 71 to show which you are claiming. If
you claim a credit, it can reduce your
required deposits of withheld tax for 2009.

Line 63b. Include on line 63b any tax
liability attributable to adjustments of
underwithheld tax on corporate
distributions made in calendar year 2008 if:
● The distributing corporation made a
reasonable estimate of accumulated and
current earnings and profits under
Regulations section 1.1441-3(c)(2)(ii)(A) and
● The distributing corporation or
intermediary paid over the underwithheld
tax by March 16, 2009.
If you are a regulated investment
company (RIC) or a real estate investment
trust (REIT) that paid a dividend in January
subject to section 852(b)(7) or section
857(b)(9) (relating to certain dividends
declared in the preceding October,
November, or December), enter your
additional tax liability on those dividends
declared in 2008 but paid in January 2009
less any additional tax liability on those
dividends declared in 2007 but paid in
January 2008. Show any negative amount
in brackets. Attach a statement showing
your calculation.

If you want to allow any individual,
corporation, firm, organization, or
partnership to discuss your 2008 Form
1042 with the IRS, check the “Yes” box in
the Third Party Designee section of the
return. Also, enter the name, phone
number, and any five numbers that the
designee chooses as his or her personal
identification number (PIN). The
authorization applies only to the tax form
upon which it appears.
By checking the “Yes” box, you are
authorizing the IRS to call the designee to
answer any questions relating to the
information reported on your tax return.
You are also authorizing the designee to:
● Exchange information concerning your
tax return with the IRS, and
● Request and receive written tax return
information relating to your tax return
including copies of specific notices,
correspondence, and account transcripts.
You are not authorizing the designee to
receive any refund check, bind you to
anything (including additional tax liability),
or otherwise represent you before the IRS.
If you want to expand the designee’s
authorization, see Pub. 947, Practice
Before the IRS and Power of Attorney.
The authorization automatically expires
one year from the due date (without regard
to extensions) for filing your 2008 Form
1042. If you or your designee desire to
terminate the authorization, a written
statement conveying your wish to revoke
the authorization should be submitted to
the IRS service center where the return
was processed.

Line 64. Enter the total tax deposits you
made (including amounts paid with an
extension of time to file).
Line 66. You are permitted to take a
credit for amounts withheld by other
withholding agents that pertain to the
total net tax liability reported on line 63c.
For example, you are a QI and the
amount you entered on line 63c includes
amounts withheld by a U.S. withholding
agent. You may take a credit on line 66
for the amounts that were withheld by
the U.S. withholding agent. The amount
on line 66 should equal the sum of all
Forms 1042-S, box 8, that you file for
the year.

CAUTION

If you are a QI requesting a
refund, you must attach the
corresponding Form(s) 1042-S
received to support the amount

4

must complete the entire form, including all
filing information for the calendar year, and
sign the return. Attach a statement
explaining why you are filing an amended
return (for example, you are filing because
the tax liability for May was incorrectly
reported due to a mathematical error).
If you are also amending Form(s)
1042-S, see Amended Returns in the Form
1042-S instructions.
Do not amend Form 1042 to recover
taxes overwithheld in the prior year. For
more information, see Adjustment for
Overwithholding in Pub. 515.

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Line 70. The penalty for failure to deposit
tax applies to the amount underpaid when
the deposit was due. See Deposit
Requirements on page 2. The penalty rates
are 2% for deposits made 1 to 5 days late,
5% for deposits made 6 to 15 days late,
and 10% for deposits made 16 or more
days late. However, the penalty is 15% if
the tax is not deposited within 10 days after
the IRS issues the first notice demanding
payment. Add the penalty to any tax due
and enter the total on line 68. If you are due
a refund, subtract the penalty from the
overpayment you show on line 69.
For information on other penalties, see
Interest and Penalties on page 3.

Third Party Designee

Amended Return
If you have to make changes to your Form
1042 after you submit it, file an amended
Form 1042. Use a Form 1042 for the year
you are amending. Check the “Amended
Return” box at the top of the form. You

Privacy Act and Paperwork Reduction
Act Notice. We ask for the information on
this form to carry out the Internal Revenue
laws of the United States. Sections 1441,
1442, and 1446 (for PTPs) require
withholding agents to report and pay over
to the IRS taxes withheld from certain U.S.
source income of foreign persons. Form
1042 is used to report the amount of
withholding that must be paid over. Form
1042-S is used to report the amount of
income and withholding to the payee.
Section 6109 requires you to provide your
employer identification number. Routine
uses of this information include giving it to
the Department of Justice for civil and
criminal litigation, and cities, states, and
the District of Columbia for use in
administering their tax laws. We may also
disclose this information to other countries
under a tax treaty, to federal and state
agencies to enforce federal nontax criminal
laws, or to federal law enforcement and
intelligence agencies to combat terrorism.
If you fail to provide this information in a
timely manner, you may be liable for
penalties and interest.
You are not required to provide the
information requested on a form that is
subject to the Paperwork Reduction Act
unless the form displays a valid OMB
control number. Books or records relating
to a form or its instructions must be
retained as long as their contents may
become material in the administration of
any Internal Revenue law. Generally, tax
returns and return information are
confidential, as required by section 6103.
The time needed to complete and file
these forms will vary depending on
individual circumstances. The estimated
average time is: Recordkeeping, 9 hr., 48
min.; Learning about the law or the form,
2 hr., 25 min.; Preparing the form, 4 hr.,
33 min.; and Copying, assembling, and
sending the form to the IRS, 32 min.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form simpler,
we would be happy to hear from you. You
can write to the Internal Revenue Service,
Tax Products Coordinating Committee,
SE:W:CAR:MP:T:T:SP, 1111 Constitution
Ave. NW, IR-6526, Washington, DC 20224.
Do not send the form to this address.
Instead, see Where and When To File on
page 2.