Foreign Person's U.S. Source Income Subject to Withholding

2015

Department of the Treasury
Internal Revenue Service

Instructions for Form 1042-S
Foreign Person's U.S. Source Income Subject to Withholding
Section references are to the Internal Revenue
Code unless otherwise noted.

Future Developments

For the latest information about
developments related to Form 1042-S,
and its instructions, such as legislation
enacted after they were published, go to
www.irs.gov/form1042-S.

General Instructions
Except as otherwise provided
in these instructions, use the
CAUTION
2015 Form 1042-S only for
amounts paid during 2015. Do not use
the 2015 Form 1042-S for amounts paid
during 2014.

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What's New
Name and EIN of primary withholding agent. Beginning in calendar year
2015, for withholding agents that report
amounts withheld by another
withholding agent (in box 8), Form
1042-S requires reporting of the name
and EIN of the withholding agent that
withheld the tax (in boxes 14a and 14b).
This information was optional for 2014
but is required for amounts paid in 2015
and subsequent years.
Substitute Forms. Withholding agents
that furnish a substitute Form 1042-S to
the recipient must furnish a separate
substitute Form 1042-S for each type of
income or payment. Withholding agents
are no longer permitted to combine all
income and payments on a single
substitute Form 1042-S and all fields on
the substitute form must match the copy
filed with the IRS. Any substitute forms
must comply with the rules set out in
Pub. 1179, General Rules and
Specifications for Substitute Forms
1096, 1098, 1099, 5498, W-2G, and
1042-S. A substitute of Form 1042-S,
Copy A, must be an exact copy of Form
1042-S, Copy A. If it is not, the form may
be rejected as incorrect and the IRS
may impose penalties. For more
information, see Substitute Forms, later.
Account-by-account reporting for
U.S. financial institutions. For
amounts paid on or after January 1,
2016, a U.S. financial institution will be
required to report payments of the same
type of income (as determined by the
Feb 09, 2015

Income code in box 1) made to multiple
financial accounts held by the same
beneficial owner on separate Forms
1042-S for each account.
Expired tax provisions. On page 8,
the section pertaining to “Withholding on
Dispositions of U.S. Real Property
Interests by Publicly Traded Trusts and
Qualified Investment Entities (QIEs)”
has been amended in accordance with
the termination provision of section
897(h)(4) (A)(ii). In the past, Congress
has extended the applicability of section
897(h)(4)(A)(i)(II). You can find out
whether legislation has extended the
applicability of this section at
www.irs.gov/form1042s.
List of foreign country codes. The
list of foreign country codes has been
removed from these instructions. Filers
must now use the list of country codes
at IRS.gov. A list of foreign countries
with which the United States has an
income tax treaty is also available at
IRS.gov. If more information concerning
these lists becomes available after
these instructions are published, it will
be posted at www.irs.gov/form1042s.

Reminders
Foreign Account Tax Compliance
Act (FATCA). Beginning in 2014, the
Form 1042-S was modified to
accommodate reporting of payments
and amounts withheld under the
provisions commonly known as FATCA
or Chapter 4 of the Internal Revenue
Code (chapter 4) in addition to those
amounts required to be reported under
Chapter 3 of the Internal Revenue Code
(chapter 3). Form 1042-S requires the
reporting of an applicable exemption to
the extent withholding under chapter 4
did not apply to a payment of U.S
source fixed or determinable annual or
periodical (FDAP) income (including
deposit interest) that is reportable on
Form 1042-S. When a U.S. financial
institution or U.S branch of a foreign
financial institution reports a payment
made to its financial account, Form
1042-S also requires the reporting of
additional information about a recipient
of the payment, such as the recipient's
account number, date of birth, and
foreign taxpayer identification number, if
any. For withholding agents,
Cat. No. 64278A

intermediaries, flow-through entities,
and recipients, Form 1042-S requires
that the chapter 3 status (or
classification) and, when the payment
reported is a withholdable payment, the
chapter 4 status be reported on the form
according to codes provided in these
instructions. For the requirement of a
withholding agent to file a Form 1042-S
for chapter 4 purposes, see Regulations
section 1.1474-1(d).
Electronic filing requirement for financial institutions. Beginning
January 1, 2014, 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
file). See the instructions under
Electronic Reporting, later.
Specified Federal procurement payments. Specified Federal procurement
payments (described under section
5000C(b)) paid to foreign persons that
are subject to withholding under section
5000C must be reported on Form
1042-S. For more information, see
Specified Federal Procurement
Payments Made to Foreign Persons,
later.
Interest on deposits. Beginning
January 1, 2013, deposit interest
described in section 871(i)(2)(A)
aggregating $10 or more paid to certain
nonresident alien individuals with
respect to a deposit maintained at an
office within the United States and held
by a resident of certain countries must
be reported on Form 1042-S. For more
information, see Interest on deposits,
later.
FIRE System. For files submitted on
the FIRE System, it is the responsibility
of the filer to check the status within 5
business days to verify the results of the
transmission. The IRS will not mail error
reports for files that are bad.

Purpose of Form

Use Form 1042-S to report income
described under Amounts Subject to
Reporting on Form 1042-S, later, and to
report amounts withheld under
chapter 3 or chapter 4.
Use Form 1042-S to report specified
Federal procurement payments paid to

foreign persons that are subject to
withholding under section 5000C.
Also use Form 1042-S to report
distributions of effectively connected
income by a publicly traded partnership
or nominee. See Publicly Traded
Partnerships (Section 1446 Withholding
Tax), later.
Every person required to
deduct and withhold any tax
CAUTION
under chapter 3 or chapter 4 is
liable for such tax. Every person
required to deduct and withhold any tax
on payments made to expatriates is
liable for such tax.

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Do not use Form 1042-S to report an
item required to be reported on any of
the following forms.
Form W-2 (wages and other
compensation made to employees
(other than compensation for dependent
personal services for which the
beneficial owner is claiming treaty
benefits), including wages in the form of
group-term life insurance).
Form 1099.
Form 8288-A, Statement of
Withholding on Dispositions by Foreign
Persons of U.S. Real Property Interests,
or Form 8805, Foreign Partner's
Information Statement of Section 1446
Withholding Tax. Withholding agents
otherwise required to report a
distribution partly on a Form 8288-A or
Form 8805 and partly on a Form 1042-S
may instead report the entire amount on
Form 8288-A or
Form 8805.
Form 8966, FATCA Report. Foreign
financial institutions (FFIs), sponsoring
entities of certain FFIs and other foreign
entities, and withholding agents are
required to report on Form 8966 certain
account holders and payees. An FFI or
withholding agent may also be required
to file Form 1042-S to report payments
of U.S. source FDAP income made to
such persons and to report tax
deducted and withheld, if any.

Who Must File

Every withholding agent (defined in
Definitions, later) must file an
information return on Form 1042-S to
report amounts paid during the
preceding calendar year that are
described under Amounts Subject to
Reporting on Form 1042-S, later.
However, withholding agents who are
individuals are not required to report a
payment on Form 1042-S if they are not
making the payment as part of their
trade or business and no withholding is
required to be made on the payment.
For example, an individual making a

payment of interest that qualifies for the
portfolio interest exception from
withholding is not required to report the
payment if the portfolio interest is paid
on a loan that is not connected to the
individual's trade or business. However,
an individual who is a withholding agent
paying an amount that actually has been
subject to withholding is required to
report the payment. Also, an individual
paying an amount on which withholding
is required must report the payment,
whether or not the individual actually
withholds. See Multiple Withholding
Agent Rule, later, for exceptions to
reporting when another person has
reported the same payment to the
recipient. Also see Publicly Traded
Partnerships (Section 1446 Withholding
Tax), later.
Every payor of a specified Federal
procurement payment must file a Form
1042-S for payments withheld upon
under section 5000C.
You must otherwise file a Form
1042-S even if you did not withhold tax
under chapter 3 because the income
was exempt from tax under a U.S. tax
treaty or the Code, including the
exemption for income that is effectively
connected with the conduct of a trade or
business in the United States, or you
released the tax withheld to the
recipient. For exceptions, see Amounts
That Are Not Subject to Reporting on
Form 1042-S, later.
Amounts paid to an individual that is
a bona fide resident of a U.S.
possession or territory are not subject to
reporting on Form 1042-S if the
beneficial owner of the income is a U.S.
citizen, national, or resident alien (such
amounts may be subject to Form 1099
reporting).
If you file Form 1042-S, you
also must file Form 1042,
CAUTION
Annual Withholding Tax Return
for U.S. Source Income of Foreign
Persons. See Form 1042, and the
instructions to the form, for more
information.

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Where, When, and
How To File

Forms 1042-S, whether filed on paper
or electronically, must be filed with the
Internal Revenue Service by March 15,
2016. You also are required to furnish
Form 1042-S to the recipient of the
income by March 15, 2016.
Copy A is filed with the Internal
Revenue Service. Send all paper Forms
1042-S with Form 1042-T, Annual
Summary and Transmittal of Forms
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1042-S, to the address in the Form
1042-T instructions. 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. See
Payments by U.S. Withholding Agents,
later, and the Form 1042-T instructions
for more information. If you are a
financial institution or you have 250 or
more Forms 1042-S to file (irrespective
of whether you are a financial institution
or not), follow the instructions under
Electronic Reporting, later.
Attach only Copy A to Form
1042-T. Copies B, C, and D
should be provided to the
recipient of the income. Copy E should
be retained by the withholding agent.

TIP

With respect to a withholdable
payment, the recipient copy should be
provided to the intermediary or
flow-through entity named as a recipient
with respect to a chapter 4 reporting
pool, if applicable.
Extension of time to file. To request
an extension of time to file Forms
1042-S, file Form 8809, Application for
Extension of Time To File Information
Returns. See the Form 8809
instructions for where to file that form.
You should request an extension as
soon as you are aware that an
extension is necessary, but no later than
the due date for filing Form 1042-S. By
filing Form 8809, you will get an
automatic 30-day extension to file Form
1042-S. If you need more time, a
second Form 8809 may be submitted
before the end of the initial extended
due date. See Form 8809 for more
information.
Recipient copies. You may request
an extension of time to provide the
statements to recipients by sending a
letter to:
Internal Revenue Service
Information Returns Branch
Attn: Extension of Time
Coordinator
240 Murall Drive Mail Stop 4360
Kearneysville, WV 25430
See Extension to provide statements to
recipients in Pub. 515, Withholding of
Tax on Nonresident Aliens and Foreign
Entities.
See Pub. 1187, Specifications
for Filing Form 1042-S, Foreign
CAUTION
Person's U.S. Source Income
Subject to Withholding, Electronically,
for more information about filing
extension requests electronically
instead of on Form 8809.

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Instructions for Form 1042-S (2015)

Electronic Reporting

If you are either a person (including a
corporation, partnership, individual,
trust, or estate) that is required to file
250 or more Forms 1042-S, or a
financial institution, whether U.S. or
foreign, you are required to submit
Forms 1042-S electronically.
Electronic submissions are filed
using the Filing Information Returns
Electronically (FIRE) System. The FIRE
System operates 24 hours a day, 7 days
a week, at fire.irs.gov. For more
information, see Pub. 1187.
The electronic filing requirement
applies separately to original and
amended returns. For a withholding
agent other than a financial institution,
the filing requirement applies
individually to each reporting entity as
defined by its separate taxpayer
identification number (TIN). For
example, if you have 300 original Forms
1042-S, they must be filed
electronically. However, if 200 of those
forms contained erroneous information,
the amended returns may be filed on
paper forms because the number of
amended Forms 1042-S is less than the
250-or-more filing requirement.
If you file electronically, do not
file the same returns on paper.
CAUTION
Duplicate filing may cause
penalty notices to be generated.

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Note. Even though as many as 249
Forms 1042-S may be submitted on
paper to the IRS by a filer other than a
financial institution, the IRS encourages
filers to transmit forms electronically.
Hardship waiver. For a withholding
agent other than a financial institution,
QI, WP, or WT, to receive a hardship
waiver from the required filing of Forms
1042-S electronically, submit Form
8508, Request for Waiver From Filing
Information Returns Electronically.
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 additional
information and instructions on filing
Forms 1042-S electronically, extensions
of time to file (Form 8809), and hardship
waivers (Form 8508), see Pub. 1187.
You also can call the Information
Reporting Program at 866-455-7438
(toll free) or 304-263-8700 (not a
toll-free number). Do not call the
Information Reporting Program to
answer tax law questions. See Caution,
below, for additional information. The
Information Reporting Program also can
Instructions for Form 1042-S (2015)

be reached by fax at 877-477-0572 (toll
free) and international fax at
304-579-4105 (not a toll-free number).
This call site does not answer
tax law questions concerning
CAUTION
the requirements for
withholding of tax on payments under
chapter 3 or chapter 4 of the Code. If
you need such assistance, you can call
267-941-1000 (not a toll-free number)
from 6:00 a.m. to 11:00 p.m. Eastern
time or write to:

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Internal Revenue Service
International Section
Philadelphia, PA 19255-0725

Additional Information

For more information on the withholding
of tax, see Pub. 515. To order this
publication and other publications and
forms, call 1-800-TAX-FORM
(1-800-829-3676). You also can
download forms and publications from
IRS.gov.

Record Retention

Withholding agents should retain a copy
of the information returns filed with the
IRS, or have the ability to reconstruct
the data, for at least 3 years after the
reporting due date.

Substitute Forms

The official Form 1042-S is the standard
for substitute forms. Because a
substitute form is a variation from the
official form, you should know the
requirements of the official form for the
year of use before you modify it to meet
your needs. The IRS provides several
means of obtaining the most frequently
used tax forms. These include the
Internet and DVD. For details on the
requirements of substitute forms, see
Pub. 1179.
Note. For amounts paid during
calendar year 2015, a withholding agent
is required to provide a recipient with a
separate substitute Form 1042-S for
each type of income or other payment.
All of the fields on the substitute form
must match the copy filed with the IRS.
However, if you are reporting bank
deposit interest paid to certain
nonresident aliens, you may truncate
the recipient's TIN on a substitute form.
Penalty for filing incorrect
substitute form. Privately printed
substitute Forms 1042-S must be exact
copies of both the format and content of
the official Form 1042-S. If you file a
substitute for Form 1042-S, Copy A,
with the IRS that is not an exact copy of
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the official Form 1042-S, Copy A, you
may be subject to a penalty for failure to
file a correct return. See Penalties, later.

Deposit Requirements

For information and rules concerning
federal tax deposits, see Depositing
Withheld Taxes in Pub. 515 or Deposit
Requirements in the Instructions for
Form 1042.

Definitions
Withholding agent. A withholding
agent is any person, U.S. or foreign, that
has control, receipt, or custody of an
amount subject to withholding under
chapter 3, who can disburse or make
payments of an amount subject to
withholding, or who makes a
withholdable payment under chapter 4.
The withholding agent may be an
individual, corporation, partnership,
trust, association, or any other entity.
The term withholding agent also
includes, but is not limited to, a qualified
intermediary (QI), a nonqualified
intermediary (NQI), a withholding
foreign partnership (WP), a withholding
foreign trust (WT), a flow-through entity,
a U.S. branch that is treated as a U.S.
person under Regulations section
1.1441-1(b)(2)(iv)(A), a territory FI, a
nominee under section 1446, and an
authorized agent. A person may be a
withholding agent even if there is no
requirement to withhold from a payment
or if another person has already
withheld the required amount from a
payment.
In most cases, the U.S. person who
pays (or causes to be paid) the item of
U.S. source income to a foreign person
(or to its agent) must withhold. However,
other persons may be required to
withhold. For example, if a payment is
made by a QI (whether or not it
assumes primary withholding
responsibility) and the QI knows that
withholding was not done by the person
from which it received the payment,
then that QI is required to do the
appropriate withholding. In addition,
withholding must be done by any QI that
assumes primary withholding
responsibility under chapters 3 and 4, a
WP, a WT, a U.S. branch that agrees to
be treated as a U.S. person under
Regulations section 1.1441-1(b)(2)(iv)
(A), or an authorized agent. Finally, if a
payment is made by an NQI or a
flow-through entity that knows, or has
reason to know, that withholding was
not done, that NQI or flow-through entity
is required to withhold since it also falls
within the definition of a withholding
agent.

Account holder. Generally, the
account holder is the person that holds
the account. See Regulations section
1.1471-5(a).
Authorized agent. An agent is an
authorized agent for purposes of acting
as a reporting agent for filing Form 1042
or making tax deposits and payments
only if all five of the following conditions
apply.
1. There is a written agreement
between the withholding agent and the
person acting as agent.
2. A Form 8655, Reporting Agent
Authorization, is filed with the IRS.
3. The books and records and
relevant personnel of the agent are
available to the withholding agent.
4. The withholding agent remains
fully liable for the acts of its agent and
does not assert any of the defenses that
otherwise may be available, and
5. If the agent is making deposits
and tax payments or filing Forms
1042-S on behalf of its principal, the
authorized agent should be reported as
the withholding agent on Form 1042-S,
boxes 12a through 12i.
A sponsoring entity is a reporting
agent with respect to withholdable
payments and must fulfill the above
conditions to be an authorized agent.
For complete details on these
conditions, see Regulations sections
1.1441-7(c) and 1.1474-1(a)(3)(ii).
Beneficial owner. For payments other
than those for which a reduced rate of
withholding is claimed under an income
tax treaty, the beneficial owner of
income in most cases is the person who
is required under U.S. tax principles to
include the income in gross income on a
tax return. A person is not a beneficial
owner of income, however, to the extent
that person is receiving the income as a
nominee, agent, or custodian, or to the
extent the person is a conduit whose
participation in a transaction is
disregarded. In the case of amounts
paid that do not constitute income,
beneficial ownership is determined as if
the payment were income.
Foreign partnerships, foreign simple
trusts, and foreign grantor trusts are not
the beneficial owners of income paid to
the partnership or trust. The beneficial
owners of income paid to a foreign
partnership in most cases are the
partners in the partnership, provided
that the partner is not itself a
partnership, foreign simple or grantor
trust, nominee, or other agent. The
beneficial owner of income paid to a

foreign simple trust (a foreign trust that
is described in section 651(a)) in most
cases is the beneficiary of the trust, if
the beneficiary is not a foreign
partnership, foreign simple or grantor
trust, nominee, or other agent. The
beneficial owner of a foreign grantor
trust (a foreign trust to the extent that all
or a part of the income of the trust is
treated as owned by the grantor or
another person under sections 671
through 679) is the person treated as
the owner of the trust. The beneficial
owner of income paid to a foreign
complex trust (a foreign trust that is not
a foreign simple trust or foreign grantor
trust) is the trust itself.
The beneficial owner of income paid
to a foreign estate is the estate itself.
A payment to a U.S. partnership,
U.S. trust, or U.S. estate is not subject
to withholding under chapter 3 or 4. A
U.S. partnership, trust, or estate should
provide the withholding agent with a
Form W-9, Request for Taxpayer
Identification Number and Certification.
In most cases, these beneficial owner
rules apply for purposes of section
1446; however, there are exceptions.
1. Chapter 3 withholding rate pool.
A payment of a single type of income,
determined in accordance with the
income codes used to file Form 1042-S,
that is subject to a single rate of
withholding and a single chapter 4
exemption code.
2. Chapter 4 withholding rate pool.
A pool of account holders or payees
provided on an FFI withholding
statement (or a chapter 4 withholding
statement). See Regulations section
1.1471-1(b)(20).
Disregarded entity. A business entity
that has a single owner and is not a
corporation under Regulations section
301.7701-2(b) is disregarded as an
entity separate from its owner.
Dividend equivalent. To the extent
specified in section 871(m), and the
regulations thereunder, a dividend
equivalent is a payment that, directly or
indirectly, is contingent on, or
determined by reference to, the
payment of a dividend from U.S.
sources. Dividend equivalent payments
include the following payments.
1. A substitute dividend made under
a securities lending or sale-repurchase
transaction involving a U.S. stock, and
2. A payment made under a
specified notional principal contract.

Exempt recipient. An exempt recipient
is any payee that is exempt from the
Form 1099 reporting requirements.
Expatriate. A person is considered an
expatriate if he or she relinquishes U.S.
citizenship or, in the case of a long-term
resident of the United States, ceases to
be a lawful permanent resident as
defined in section 7701(b)(6).
Fiscally transparent entity. An entity
is treated as fiscally transparent with
respect to an item of income for which
treaty benefits are claimed to the extent
that the interest holders in the entity
must, on a current basis, take into
account separately their shares of an
item of income paid to the entity,
whether or not distributed, and must
determine the character of the items of
income as if they were realized directly
from the sources from which realized by
the entity. For example, partnerships,
common trust funds, and simple trusts
or grantor trusts in most cases are
considered to be fiscally transparent
with respect to items of income received
by them.
Flow-through entity. A flow-through
entity is a foreign partnership (other than
a withholding foreign partnership), a
foreign simple or grantor trust (other
than a withholding foreign trust), or, for
any payments for which a reduced rate
of withholding under an income tax
treaty is claimed, any entity to the extent
the entity is considered to be fiscally
transparent under section 894 with
respect to the payment by an interest
holder's jurisdiction.
Financial Institution. A financial
institution (FI) is an entity described in
Regulations section 1.1471-5(e).
Foreign Financial Institution (FFI). A
foreign financial institution (FFI) is an
entity described in Regulations section
1.1471-5(d) or as a financial institution
under an Intergovernmental Agreement
(IGA).
Deemed-Compliant FFI. A
deemed-compliant FFI is a foreign
financial institution that is deemed to
satisfy the requirements of section
1471(b) and is either a certified
deemed-compliant FFI or registered
deemed-compliant FFI (including a
reporting model 1 FFI). See Regulations
sections 1.1471-1(b)(12), (105), and
(107) for the definition of certified
deemed-compliant FFI, registered
deemed-compliant FFI, and reporting
model 1 FFI.
Nonparticipating FFI. A
nonparticipating FFI is a foreign

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Instructions for Form 1042-S (2015)

financial institution that is not a
participating FFI, deemed-compliant
FFI, or exempt beneficial owner.
Participating FFI. A participating
FFI is a foreign financial institution that
has agreed to satisfy the obligations of
an FFI agreement under chapter 4,
including an FFI described in a Model 2
IGA that has agreed to comply with the
requirements of an FFI agreement
(reporting model 2 FFI). See
Regulations section 1.1471-1(b)(73) for
the definition of a Model 2 IGA.
Foreign person. A foreign person
includes a nonresident alien individual,
a foreign corporation, a foreign
partnership, a foreign trust, a foreign
estate, and any other person that is not
a U.S. person. The term also includes a
foreign branch or office of a U.S.
financial institution or U.S. clearing
organization if the foreign branch is a
QI. A payment to a U.S. branch of a
foreign person is treated as a payment
to a foreign person for purposes of Form
1042-S.
Global intermediary identification
number. The global intermediary
identification number (GIIN) is the
identification number that is assigned to
a participating FFI (including a reporting
model 2 FFI), registered
deemed-compliant FFI (including a
reporting model 1 FFI), or other entity
for chapter 4 reporting purposes.
Intermediary. An intermediary is a
person that 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. A
QI (other than a limited FFI) that is a
financial institution must have a
chapter 4 status described in
Regulations section 1.1441-1(e)(5)(ii).
An entity must indicate its status as a QI
on a Form W-8IMY submitted to a
withholding agent. For information on a
QI withholding agreement, see Revenue
Procedure 2014-39 (or any superseding
revenue procedure) and www.irs.gov/
Businesses/Corporations/QualifiedIntermediaries-(QI).
A branch of a financial institution may
not act as a QI in a country that does not
have approved know-your-customer
(KYC) rules. Countries having approved
KYC rules are listed on IRS.gov.
Branches that operate in non-KYC
approved jurisdictions as intermediaries
Instructions for Form 1042-S (2015)

are required to act as nonqualified
intermediaries.
Nonqualified intermediary (NQI).
An NQI is any intermediary that is not a
U.S. person and that is not a QI.
Private arrangement intermediary
(PAI). A QI that is an FFI may enter into
a contractual agreement with another
intermediary under which the other
intermediary generally agrees to
perform all of the obligations of the QI
with respect to the accounts maintained
directly by the other intermediary. See
the QI Agreement for the requirements
of a PAI and a QI's agreement with a
PAI.
Nonfinancial foreign entity. A
nonfinancial foreign entity (NFFE) is a
foreign entity or an entity incorporated
or organized under the laws of any U.S.
territory that is not a financial institution.
Excepted nonfinancial foreign
entity. The term excepted NFFE
means an NFFE that is described in
Regulations section 1.1472-1(c)(1) and
generally includes a publicly traded
corporation, certain affiliated entities
related to a publicly traded corporation,
certain territory entities, active NFFEs,
and entities excluded from the definition
of foreign financial institution (excluded
FFIs) described in Regulations section
1.1471-5(e)(5).
Non-exempt recipient. A non-exempt
recipient is any person who is not an
exempt recipient under chapter 61 of
the Code.
Nonresident alien individual. Any
individual who is not a citizen or resident
of the United States is a nonresident
alien individual. An alien individual
meeting either the green card test or the
substantial presence test for the
calendar year is a resident alien. Any
person not meeting either test is a
nonresident alien individual.
Additionally, an alien individual not
otherwise a citizen of the U.S. who is a
resident of a foreign country under the
residence article of an income tax
treaty, or an alien individual who is a
bona fide resident of Puerto Rico,
Guam, the Commonwealth of the
Northern Mariana Islands, the U.S.
Virgin Islands, or American Samoa, is a
nonresident alien individual. See Pub.
519, U.S. Tax Guide for Aliens, for more
information on resident and nonresident
alien status.
Even though a nonresident
alien individual married to a
CAUTION
U.S. citizen or resident alien
may choose to be treated as a resident

!

-5-

alien for certain purposes (for example,
filing a joint income tax return), such
individual is still treated as a
nonresident alien for withholding tax
purposes.
Payer. A payer is the person for whom
the withholding agent acts as an
authorized agent pursuant to an
agreement whereby the withholding
agent agrees to withhold and report a
payment.
Payee. Except as otherwise provided,
the payee is the person to whom a
payment is made, regardless of whether
such person is the beneficial owner of
the amount or treated as the recipient of
the payment for purposes of reporting
on Form 1042-S. See Regulations
section 1.1471-3(a).
Presumption rules. For withholdable
payments and for amounts subject to
withholding under chapter 3, the
presumption rules are those rules that a
withholding agent must follow to
determine the status of a beneficial
owner or payee (for example, as a U.S.
person or a foreign person) when it
cannot reliably associate a payment
with valid documentation. See, for
example, Regulations sections
1.1441-1(b)(3), 1.1441-4(a),
1.1441-5(d) and (e), 1.1441-9(b)(3),
1.1446-1(c)(3), and 1.6049-5(d). Also
see Pub. 515. For a withholdable
payment (defined in Regulations section
1.1473-1(a)), the withholding agent
must also follow the presumption rules
under Regulations sections 1.1471-3(f)
and, for an FFI, 1.1471-4(c)(4)(i) to
determine the chapter 4 status of the
payee when it cannot reliably associate
a payment with valid documentation.
Publicly traded partnership (PTP). A
PTP is any partnership in which
interests are regularly traded on an
established securities market or are
readily tradable on a secondary market
(regardless of the number of its
partners). However, it does not include
a PTP treated as a corporation under
section 7704.
Qualified securities lender (QSL). A
QSL is a foreign financial institution that
satisfies all of the following.
It is a bank, custodian, broker-dealer,
or clearing organization that is regulated
by the government in its home
jurisdiction and that regularly borrows
and lends the securities of U.S.
corporations to unrelated customers.
It is subject to audit by the IRS under
section 7602 or by an external auditor if
it is a QI.

It provides to the withholding agent
an annual certification of its QSL status.
It meets the requirements to qualify
as a QSL provided in Notice 2010-46 for
the transition period and until additional
published guidance is issued. See
Notice 2010-46, 2010-24 I.R.B. 757,
available at
www.irs.gov/irb/2010-24_IRB/ar09.html.
Recalcitrant account holder.
Generally, a recalcitrant account holder
is an account holder of a participating or
deemed-compliant FFI that failed to
provide the documentation required
under chapter 4 to determine the
account holder's status or to report the
account as a U.S. account. See
Regulations section 1.1471-5(g).
Recipient. For chapter 3 purposes, a
recipient includes any of the following.
A beneficial owner of income.
A QI.
A WP or WT.
A U.S. branch that is treated as a
U.S. person under Regulations section
1.1441-1(b)(2)(iv)(A).
A foreign partnership or a foreign trust
(other than a WP or WT), but only to the
extent the income is effectively
connected with its conduct of a trade or
business in the United States.
A payee who is not known to be the
beneficial owner, but who is presumed
to be a foreign person under the
presumption rules.
A PAI.
A partner receiving a distribution of
effectively connected income from a
PTP or nominee.
A QSL.
For chapter 3 purposes, a recipient
does not include any of the following.
An NQI.
A nonwithholding foreign partnership,
if the income is not effectively
connected with its conduct of a trade or
business in the United States.
A disregarded entity, other than a
hybrid entity claiming treaty benefits.
A foreign trust that is described in
section 651(a) (a foreign simple trust) if
the income is not effectively connected
with the conduct of a trade or business
in the United States.
A foreign trust to the extent that all or
a part of the trust is treated as owned by
the grantor or other person under
sections 671 through 679 (a foreign
grantor trust).
A U.S. branch that is not treated as a
U.S. person unless the income is, or is
treated as, effectively connected with
the conduct of a trade or business in the
United States.

For chapter 4 purposes, a recipient
also includes any of the following.
A recalcitrant account holder not
included in a chapter 4 reporting pool.
A QI.
A WP or WT.
A PAI.
A participating FFI or
deemed-compliant FFI that is an NQI,
NWP, or NWT and provides chapter 4
withholding rate pool information to the
extent permissible.
A participating FFI or
deemed-compliant FFI that is the
beneficial owner, including a
nonreporting FFI under a model 1 or 2
IGA.
A U.S. branch or territory FI treated
as a U.S. person under Regulations
section 1.1441-1(b)(2)(iv)(A).
An NFFE that is not a flow-through
entity or acting as an intermediary.
A foreign partnership or a foreign trust
(other than a WP or WT), but only to the
extent the income is effectively
connected with its conduct of a trade or
business in the United States.
A partner or beneficiary of a
flow-through entity that is an NFFE
(other than a WP or WT).
A nonparticipating FFI that is a
beneficial owner.
An exempt beneficial owner that is
not a flow-through entity or acting as an
intermediary.
For chapter 4 purposes, a recipient is
generally the same person that is a
recipient for chapter 3 purposes but
does not include any of the following.
An account holder, partner,
beneficiary, owner, or payee of a
nonparticipating FFI unless it is an
exempt beneficial owner.
A participating FFI or
deemed-compliant FFI if the withholding
agent issues a Form 1042-S to the FFI’s
account holder, partner, owner, or
payee.
An account holder, partner, owner, or
payee of a participating FFI or
registered deemed-compliant FFI that is
included in a chapter 4 reporting pool.

The underlying security is not readily
tradable on an established securities
market.
In connection with entering into the
contract, the underlying security is
posted as collateral by any short party
to the contract with any long party to the
contract.
The IRS identifies the contract as an
SNPC.

Specified notional principal contract
(SNPC). An SNPC is any notional
principal contract that satisfies one or
more of the following.
In connection with entering into the
contract, any long party to the contract
transfers the underlying security to any
short party to the contract.
In connection with the termination of
the contract, any short party to the
contract transfers the underlying
security to any long party to the
contract.

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 under
chapter 3 (except for sections 1445 and
1446) and under chapter 4. For
information on these withholding
agreements, see Revenue Procedure

-6-

Territory FI. A territory FI is a financial
institution that is incorporated or
organized under the laws of any U.S.
territory and is not an investment entity.
See Regulations section 1.1471-5(e)(1)
(iii) for the definition of investment entity.
U.S. branch treated as a U.S. person.
A U.S. branch may agree to be treated
as a U.S. person if it meets the
requirements described in the
regulations under chapter 3. See
Regulations section 1.1441-1(b)(2)(iv)
(A). Additionally, a territory FI may agree
to be treated as a U.S. person.
The U.S. branch or territory FI must
provide a Form W-8IMY evidencing that
it is agreeing to be treated as a U.S.
person.
A U.S. branch that is treated as
a U.S. person is treated as
CAUTION
such solely for purposes of
determining whether a payment is
subject to withholding. The branch is,
for purposes of information reporting, a
foreign person, and payments to such a
branch must be reported on Form
1042-S.

!

Withholdable payment. A
withholdable payment is a payment
described in Regulations section
1.1473-1(a).
Withholding certificate. The term
“withholding certificate” refers to Form
W-8 or Form W-9 in most cases.
Note. Throughout these instructions, a
reference to or mention of “Form W-8” is
a reference to Forms W-8BEN,
W-8BEN-E, W-8ECI, W-8EXP, and/or
W-8IMY.

Instructions for Form 1042-S (2015)

2014-47 (and any superseding revenue
procedure) and Regulations section
1.1441-5.
Nonwithholding foreign
partnership (NWP) or
nonwithholding foreign trust (NWT).
An NWP or NWT is any partnership or
trust (other than a complex trust) that is
not a U.S. person and that is not a WP
or WT.

Amounts Subject to
Reporting on Form 1042-S

Amounts subject to reporting on Form
1042-S are amounts from U.S. sources
paid to foreign persons (including
persons presumed to be foreign) or
included in a U.S. payee pool that are
reportable under chapters 3 and 4, even
if no amount is deducted and withheld
from the payment because of a treaty or
Code exception to taxation or if any
amount withheld was repaid to the
payee. Amounts subject to reporting are
amounts from sources within the United
States that constitute (a) fixed or
determinable annual or periodical
(FDAP) income (including deposit
interest); (b) certain gains from the
disposal of timber, coal, or domestic
iron ore with a retained economic
interest; and (c) gains relating to
contingent payments received from the
sale or exchange of patents, copyrights,
and similar intangible property. A
payment is also subject to reporting if
withholding under chapter 4 is applied
(or required to be applied) to the
payment. Amounts subject to reporting
on Form 1042-S include, but are not
limited to, the following amounts to the
extent from U.S. sources.
Interest on deposits paid to
certain nonresident aliens. Interest
described in section 871(i)(2)(A)
aggregating $10 or more paid with
respect to a deposit maintained at an
office within the United States if such
interest is paid to a nonresident alien
individual who is a resident of a country
identified in Revenue Procedure
2014-64 (or a superseding Revenue
Procedure) as of December 31 of the
year prior to the calendar year in which
the interest is paid. A payor may elect to
report interest described above paid to
any nonresident alien individual by
reporting all such interest. See Revenue
Procedure 2014-64 (or a superseding
Revenue Procedure) for the current list
of countries with which the United
States has in effect an income tax or
other convention or bilateral agreement
relating to exchange of information
within the meaning of section 6103(k)
(4).
Instructions for Form 1042-S (2015)

When completing Form 1042-S, use
income code 29 in box 1 and exemption
code 02 in box 3a for chapter 3
purposes and the applicable chapter 4
exemption code in box 4a, (see the
instructions for boxes 3a and 4a, later).
If you issue a substitute Form 1042-S
to the recipient, the substitute form must
include a statement that the information
on the form is being furnished to the
United States Internal Revenue Service.
Interest on deposits subject to
chapter 4 withholding. Interest on
deposits from U.S. sources are
withholdable payments and, therefore,
may be subject to withholding under
chapter 4 and, if withheld upon,
reporting is required.
Corporate distributions. The entire
amount of a corporate distribution
(whether actual or deemed) must be
reported, regardless of any estimate of
the part of the distribution that
represents a taxable dividend. Any
distribution, however, that is treated as
gain from the redemption of stock is not
an amount subject to withholding. For
information on dividends paid by a
qualified investment entity (QIE), see
Pub. 515.
Interest. This includes the part of a
notional principal contract payment that
is characterized as interest.
Rents.
Royalties.
Compensation for independent
personal services performed in the
United States.
Compensation for dependent
personal services performed in the
United States (but only if the
beneficial owner is claiming treaty
benefits).
Annuities.
Pension distributions and other
deferred income.
Most gambling winnings. However,
proceeds from a wager placed in
blackjack, baccarat, craps, roulette, or
big-6 wheel are not amounts subject to
reporting.
Cancellation of indebtedness.
Income from the cancellation of
indebtedness must be reported unless
the withholding agent is unrelated to the
debtor and does not have knowledge of
the facts that give rise to the payment.
Effectively connected income
(ECI). ECI includes amounts that are (or
are presumed to be) effectively
connected with the conduct of a trade or
business in the United States even if no
withholding certificate is required. Note
that bank deposit interest is subject to
Form 1042-S reporting if it is ECI or
otherwise reportable on Form 1042-S
-7-

(see interest on deposits, earlier). ECI of
a PTP distributed to a foreign partner
must be reported on Form 1042-S.
Notional principal contract
income. Income from notional principal
contracts that the payer knows, or must
presume, is effectively connected with
the conduct of a U.S. trade or business
is subject to reporting using income
code 32. The amount to be reported is
the amount of cash paid on the contract
during the calendar year. Any amount of
interest determined under the provisions
of Regulations section 1.446-3(g)(4)
(dealing with interest in the case of a
significant non-periodic payment) is
reportable as interest and not as
notional principal contract income. See,
however, the separate reporting for
U.S.-source dividend equivalent
payments.
Insurance premiums. Insurance
premiums from U.S. sources
(regardless of whether or not the
premium payments are subject to the
section 4371 excise tax) are
withholdable payments under chapter 4
and, if the payment is actually withheld
upon or should have been withheld
upon (but the withholding agent failed to
withhold), such amount must be
reported on Form 1042-S. Insurance
premiums from U.S. sources are
amounts subject to chapter 3
withholding (excluding amounts subject
to the section 4371 excise tax) that must
be reported on Form 1042-S.
REMIC excess inclusions. Excess
inclusions from REMICs (income code
02) and withheld tax must be reported
on Form 1042-S. A domestic
partnership must separately state a
partner's allocable share of REMIC
taxable income or net loss and the
excess inclusion amount on
Schedule K-1 (Form 1065). If the
partnership allocates all or some part of
its allocable share of REMIC taxable
income to a foreign partner, the partner
must include the partner's allocated
amount in income as if that amount was
received on the earliest to occur of (1)
the date of distribution by the
partnership; (2) the date the foreign
partner disposes of its indirect interest in
the REMIC residual interest; or (3) the
last day of the partnership's tax year.
The partnership must withhold tax on
the part of the REMIC amount that is an
excess inclusion.
An excess inclusion allocated to the
following foreign persons must be
included in that person's income at the
same time as other income from the
entity is included in income.

Shareholder of a real estate
investment trust.
Shareholder of a regulated
investment company.
Participant in a common trust fund.
Patron of a subchapter T cooperative
organization.
Students, teachers, and
researchers. Amounts paid to foreign
students, trainees, teachers, or
researchers as scholarship or fellowship
income, and compensation for personal
services (whether or not exempt from
tax under an income tax treaty), must be
reported. However, amounts that are
exempt from tax under section 117 are
not subject to reporting.
Amounts paid to foreign
governments, foreign central banks
of issue, and international
organizations. These amounts are
subject to reporting even if they are
exempt from chapter 3 withholding
under section 892 or 895.
Foreign targeted registered
obligations. Interest paid on registered
obligations targeted to foreign markets
paid by a U.S. person to a foreign
person other than a financial institution
or a member of a clearing organization
is an amount subject to reporting.
Original Issue Discount (OID) from
the redemption of an OID obligation.
The amount subject to reporting is the
amount of OID actually includible in the
gross income of the foreign beneficial
owner of the income, if known.
Otherwise, the withholding agent should
report the entire amount of OID as if the
recipient held the instrument from the
date of original issuance. See Pub.
1212, Guide to Original Issue Discount
(OID) Instruments.
Certain dispositions of U.S. real
property interests. See Withholding
on Dispositions of U.S. Real Property
Interests by Publicly Traded Trusts and
Qualified Investment Entities (QIEs),
later.
Other U.S.-source dividend
equivalent payments. Other
U.S.-source dividend equivalent
payments are payments other than
substitute dividends that qualify as
U.S.-source dividends under section
871(m) and the regulations thereunder.
Report these amounts using income
code 40 or 53.
Guarantee of indebtedness.This
includes amounts paid, directly or
indirectly, for the provision of a
guarantee of indebtedness issued after
September 27, 2010. They must be paid
by a non-corporate resident or U.S.
corporation or by any foreign person if
the amounts are effectively connected

with the conduct of a U.S. trade or
business. Report these amounts using
income code 41.
Specified Federal procurement
payments. Specified Federal
procurement payments subject to
withholding under section 5000C.

Amounts That Are Not
Subject to Reporting
on Form 1042-S
Interest and OID from short-term obligations. Interest and OID from any
obligation payable 183 days or less from
the date of original issue is generally not
required to be reported on Form
1042-S. See, however, the reporting
requirements for deposit interest
described earlier in Interest on deposits
paid to certain nonresident aliens under
Amounts Subject to Reporting on Form
1042-S.
Registered obligations targeted to
foreign markets. Interest on a
registered obligation that is targeted to
foreign markets and that qualifies as
portfolio interest is not subject to
reporting if it is paid to a registered
owner that is a financial institution or
member of a clearing organization and
you have received the required
certifications.
Reporting will be required on
interest paid on any registered
CAUTION
obligation (regardless of
whether targeted to foreign markets) if
the registered obligation is issued after
December 31, 2015.

!

Bearer obligations targeted to foreign markets. Do not file Form 1042-S
to report interest not subject to
withholding on bearer obligations if a
Form W-8 is not required.
Withholding is required on
interest paid on any bearer
CAUTION
obligations targeted to foreign
markets if the obligation is issued after
March 18, 2012. You must file Form
1042-S to report this interest paid on an
obligation issued after that date.

!

Notional principal contract payments that are not ECI. Amounts paid
on a notional principal contract other
than a specified notional principal
contract (SNPC) other than income that
is not effectively connected with the
conduct of a trade or business in the
United States should not be reported on
Form 1042-S. All amounts paid on an
SNPC that are treated as dividend
equivalent payments should be reported
as such on Form 1042-S.
-8-

Accrued interest and OID. Interest
paid on obligations sold between
interest payment dates and the part of
the purchase price of an OID obligation
that is sold or exchanged in a
transaction other than a redemption is
not subject to reporting unless the sale
or exchange is part of a plan, the
principal purpose of which is to avoid
tax, and the withholding agent has
actual knowledge or reason to know of
such plan.
Certain withholdable payments.
Withholdable payments not subject to
reporting for chapter 3 purposes (other
than bank deposit interest paid to
certain nonresident aliens) are not
required to be reported if withholding is
not applied (or required to be applied)
under chapter 4.

Withholding on
Dispositions of U.S. Real
Property Interests by
Publicly Traded Trusts
and Qualified Investment
Entities (QIEs)

In general, when a publicly traded trust
makes a distribution to a foreign person
attributable to the disposition of a U.S.
real property interest, it must withhold
tax under section 1445. However, this
withholding liability is shifted to the
person who pays the distribution to a
foreign person (or to the account of the
foreign person) if the special notice
requirement of Regulations section
1.1445-8(f) and other requirements of
Regulations section 1.1445-8(b)(1) are
satisfied.
The amount subject to withholding
for a distribution by a publicly traded
trust is determined under the large trust
rules of Regulations section 1.1445-5(c)
(3).
The rate of withholding is as follows:
1. Distribution by a publicly traded
trust that makes recurring sales of
growing crops and timber – 10%.
2. Distribution by a publicly traded
trust not described in (1) above – 35%.

Special rules apply to qualified
investment entities (QIEs). A QIE is one
of the following.
A real estate investment trust (REIT).
A regulated investment company
(RIC) that is treated as a U.S. real
property holding corporation (after
applying certain rules in section 897(h)
(4)(A)(i)(II)). The special rule for a RIC
applies only for distributions by the RIC
that are directly or indirectly attributable
to distributions that the RIC received
Instructions for Form 1042-S (2015)

from a REIT, or for purposes of applying
the wash sale rules under section
897(h)(5).
In most cases, any distribution from a
QIE attributable to gain from the sale or
exchange of a U.S. real property
interest is treated as such gain by the
nonresident alien, foreign corporation,
or other QIE receiving the distribution.
A distribution by a QIE to a
nonresident alien or foreign corporation
that is treated as gain from the sale or
exchange of a U.S. real property
interest by the shareholder is subject to
withholding at 35%.
Any distribution by a QIE on stock
regularly traded on a securities market
in the United States is not treated as
gain from the sale or exchange of a U.S.
real property interest if the shareholder
did not own more than 5% of that stock
at any time during the 1-year period
ending on the date of the distribution.
These distributions are included in the
shareholder's gross income as a
dividend (income code 06) from the
QIE, not as long-term capital gain. Use
Forms 1042-S and 1042 to report and
pay over the withheld amounts.
All other withholding required under
section 1445 is reported and paid over
using Form 8288, U.S. Withholding Tax
Return for Dispositions by Foreign
Persons of U.S. Real Property Interests,
and Form 8288-A, Statement of
Withholding on Dispositions by Foreign
Persons of U.S. Real Property Interests.
For more information on reporting
income from real property interests, see
U.S. Real Property Interest in Pub. 515.

Publicly Traded
Partnerships (Section
1446 Withholding Tax)

A publicly traded partnership (PTP)
(defined earlier in Definitions) that has
effectively connected income, gain, or
loss must pay a withholding tax under
section 1446 on distributions of that
income made to its foreign partners and
file Form 1042-S using income code 27
and chapter 4 exemption code 14. A
nominee that receives a distribution of
effectively connected income from a
PTP is treated as the withholding agent
to the extent of the amount specified in
the qualified notice received by the
nominee. For this purpose, a nominee is
a domestic person that holds an interest
in a PTP on behalf of a foreign person.
See Regulations section 1.1446-4 and
Pub. 515 for details.

Instructions for Form 1042-S (2015)

If you are a nominee that is the
withholding agent under
section 1446, enter the PTP's
name and other required information in
boxes 15a through 15i on Form 1042-S.

TIP

Partnerships (other than publicly
traded partnerships) that have
effectively connected gross income
allocable to foreign partners must file
Form 8804, Annual Return for
Partnership Withholding Tax (Section
1446). If these partnerships have
effectively connected taxable income
allocable to foreign partners, they must
also pay a withholding tax under section
1446 and report these amounts on Form
8804 and the partners' allocable shares
of these amounts on Form 8805,
Foreign Partner's Information Statement
of Section 1446 Withholding Tax.

Payments by U.S.
Withholding Agents
In general. U.S. withholding agents
making payments described under
Amounts Subject to Reporting on Form
1042-S, earlier, must file a separate
Form 1042-S for each recipient who
receives the income. Furthermore,
withholding agents filing paper Forms
1042-S are not permitted to report
multiple types of income on a Form
1042-S (or substitute form 1042-S)
furnished to a recipient or on Copy A
filed with the IRS. These filers must use
a separate Form 1042-S (or substitute
form) for information reportable on a
single type of income.
See Payments Made to Persons
Who Are Not Recipients, later, if the
payment is made to a foreign person
that is not a recipient.

Payments to Recipients
Payments directly to beneficial owners. A U.S. withholding agent making a
payment directly to a beneficial owner
must complete Form 1042-S and treat
the beneficial owner as the recipient.
Boxes 15a through 15i should be left
blank. The Form 1042-S must also
include the appropriate chapter 3 and
chapter 4 exemption codes, if
applicable, in boxes 3a and 4a, as well
as the appropriate recipient codes for
the chapter 3 and chapter 4 status
codes for a payment that is a
withholdable payment and an amount
subject to chapter 3 withholding. A U.S.
withholding agent should complete
boxes 18 through 20 only if it is
completing Form 1042-S as a paying
agent acting pursuant to an agreement
to act as an authorized agent for filing
and reporting Form 1042 and 1042-S.
-9-

In the case of foreign joint owners,
you may provide a single Form 1042-S
made out to the owner whose status you
relied upon to determine the applicable
rate of withholding (the owner subject to
the highest rate of withholding). If,
however, any one of the owners
requests its own Form 1042-S, you
must furnish a Form 1042-S to the
person who requests it, and you should
amend the originally filed Form 1042-S.
If more than one Form 1042-S is issued
for a single payment, the aggregate
amount paid and tax withheld that is
reported on all Forms 1042-S cannot
exceed the total amounts paid to joint
owners and the tax withheld on those
payments.
Example. WA, a U.S. withholding
agent, makes a withholdable payment
of U.S. source dividends to A, a foreign
individual from whom it has received a
Form W-8BEN and who is not eligible
for a reduced rate of chapter 3
withholding under a treaty. WA must file
a Form 1042-S for A with “06” in box 1
(income code), “00” in box 3a (chapter 3
exemption code), “30.00” in box 3b
(chapter 3 tax rate), “15” in box 4a
(payee not subject to chapter 4
withholding), “00.00” in box 4b
(chapter 4 tax rate), “16” in box 13b
(individual), and “23” in box 13c
(individual).
Payments to a qualified intermediary, withholding foreign partnership,
or withholding foreign trust. A U.S.
withholding agent that makes payments
to a QI (whether or not the QI assumes
primary withholding responsibility), a
withholding foreign partnership (WP), or
a withholding foreign trust (WT) should
complete Form 1042-S in most cases,
treating the QI, WP, or WT as the
recipient. See Payments allocated, or
presumed made, to U.S. non-exempt
recipients, later, for exceptions. A QI
that does not assume primary
withholding responsibility is required to
provide information regarding the
proportions of income subject to a
particular withholding rate to the
withholding agent on the withholding
statement associated with its Form
W-8IMY. In such a case, the U.S.
withholding agent must complete a
separate Form 1042-S for each
withholding rate pool of the QI. For
purposes of chapter 4, a QI may provide
a single pool of recalcitrant account
holders (rather than separate pools for
each class). In such a case, the
withholding agent may use chapter 4
pooled reporting code 49
(QI-Recalcitrant Pool-General). A QI
that assumes primary withholding

responsibility, a WP, or a WT is not
required to provide withholding rate pool
information to a withholding agent but
will report such information directly to
the IRS.
A U.S. withholding agent making
payments to a QI (that assumes primary
withholding responsibility), a WP, or a
WT must use recipient code 12
(qualified intermediary), 09 (withholding
foreign partnership), or 11 (withholding
foreign trust) as the chapter 3 status
code and must use recipient code 05
(participating FFI- other), 06
(participating FFI- reporting model 2
FFI), 07 (registered deemed-compliant
FFI- reporting model 1 FFI), 09
(registered deemed-compliant
FFI-other) for an FFI treated as
deemed-compliant under an IGA, 31
(non reporting IGA FFI) or, for a
payment to a QI, 27 (exempt beneficial
owner) as the chapter 4 status code if
the entity is an FFI that receives a
withholdable payment and provides
chapter 4 withholding rate pool
information. A U.S. withholding agent
must not use any chapter 3 pooled
reporting code (codes 27 through 33).
Use of an inappropriate recipient code
may cause a notice to be generated.
A QI is required to act in such
capacity only for designated
CAUTION
accounts. Therefore, such an
entity also may provide a Form W-8IMY
in which it certifies that it is acting as an
NQI for other accounts and, if it is an FFI
that is receiving a withholdable
payment, that it is a participating FFI,
registered deemed-compliant FFI, or
FFI treated as deemed-compliant under
an IGA. A U.S. withholding agent that
receives a Form W-8IMY on which the
foreign person providing the form
indicates that it is not acting as a QI may
not treat the foreign person as a
recipient except as otherwise provided
in these instructions. A withholding
agent must not use the EIN that a QI
provides in its capacity as such to report
payments that are treated as made to
an entity in its capacity as an NQI. In
that case, use the GIIN, if any, and EIN
that is provided by the entity on its Form
W-8IMY in which it claims that it is
acting as an NQI or flow-through entity.

!

Note. A withholding agent is required to
use chapter 4 reporting pool codes as
the chapter 4 status code in the case of
withholdable payments made to:
A QI that does not assume primary
withholding responsibility;
A participating FFI or registered
deemed-compliant FFI that is an NQI,
NWP, or NWT; or

An NQI, NWP, or NWT (other than a
nonparticipating FFI) that provides a
pool of nonparticipating FFIs,
if the QI, NQI, NWP, or NWT provides
chapter 4 withholding rate pool
information in the withholding statement
associated with its Form W-8IMY. See
the presumption rules under
Regulations section 1.1471-3(f) if such
information is not provided for a
withholdable payment made to an
entity.
Example 1. WA, a U.S. withholding
agent, makes a withholdable payment
of U.S. source dividends to QI, a
qualified intermediary that does not
assume primary chapters 3 and 4
withholding responsibility and that is a
participating FFI. QI provides WA with a
valid Form W-8IMY with which it
associates a withholding statement that
allocates 95% of the payment to a
chapter 3, 15% withholding rate pool
with a single chapter 4 exemption code,
and 5% of the payment to a chapter 4,
30% withholding rate pool of recalcitrant
account holders. WA must complete a
Form 1042-S, for the dividends
allocated to the chapter 3, 15%
withholding rate pool, showing “15.00”
in box 3b (chapter 3 tax rate), “00” in
box 3a (chapter 3 exemption code),
chapter 4 exemption code 15 (payee
not subject to chapter 4 withholding) in
box 4a, “00.00” in box 4b (chapter 4 tax
rate) and QI as the recipient in box 13d
along with recipient code 12 (qualified
intermediary) as the chapter 3 status
code and recipient code 05
(participating FFI- other) as the
chapter 4 status code. WA must also
complete a Form 1042-S, for the
dividends allocated to the chapter 4,
30% withholding rate pool, showing
chapter 3 exemption code 12 (payee
subjected to chapter 4 withholding) in
box 3a,“00.00” in box 3b (chapter 3 tax
rate), “00” in box 4a (chapter 4
exemption code), and “30.00” in box 4b
with QI as the recipient in box 13d and
recipient code 12 (qualified
intermediary) as the chapter 3 status
code and recipient code 49 (QI‐
Recalcitrant Pool‐General) as the
chapter 4 status code.
Payments allocated, or presumed
made, to U.S. non-exempt recipients.
A QI may provide Forms W-9 or other
information regarding U.S. non-exempt
recipients that the QI (or other entity
maintaining the account) is required to
report under chapter 61 and for which
the QI does not assume primary Form
1099 reporting responsibility. QI may
also provide information regarding U.S.
non-exempt recipients that QI elects to
-10-

backup withhold under section 3406
instead of withholding under chapter 4
on payments made to an account
holder. If Forms W-9 or other
information is provided together with
information allocating all or a part of the
payment to U.S. non-exempt recipients,
you must report income allocable to the
U.S. non-exempt recipients on the
appropriate Form 1099 and not on Form
1042-S even though you are paying that
income to a QI. QI may also provide
information regarding U.S. non-exempt
recipients in a chapter 4 withholding rate
pool that the withholding agent must
report on Form 1042-S.
You also may be required under the
presumption rules to treat a payment
made to a QI as made to a payee that is
a U.S. non-exempt recipient from which
you must withhold on the payment
under the backup withholding provisions
of the Code. In this case, you must
report the payment on the appropriate
Form 1099. See the General
Instructions for Certain Information
Returns.
Example 2. WA, a U.S. withholding
agent, makes a withholdable payment
of U.S. source dividends to QI, a
qualified intermediary and registered
deemed-compliant FFI that is a local FFI
described in Regulations section
1.1471-5(f)(1)(i)(A). QI provides WA
with a valid Form W-8IMY certifying that
it is transmitting Forms W-9 for U.S.
non-exempt recipients and with which it
associates a withholding statement that
allocates 95% of the payment to a
chapter 3, 15% withholding rate pool
with a single chapter 4 exemption code,
and 5% of the payment to C, a U.S.
individual. QI also provides WA with C's
Form W-9. C is a direct account holder
of QI and a U.S. citizen that is a resident
of QI's local jurisdiction that QI is not
required to report under chapter 4 (see
Regulations section 1.1471-5(f)(1)(i)(A))
and thus cannot be included in a
chapter 4 withholding rate pool of U.S.
payees. See Regulations section
1.6049-4(c)(4). WA must complete a
Form 1042-S, showing QI as the
recipient in box 13d, and WA should
use recipient code 12 (qualified
intermediary) as the chapter 3 status
code and recipient code 09 (registered
deemed-compliant FFI – other) as the
chapter 4 status code for the dividends
allocated to the 15% withholding rate
pool. WA also must complete a Form
1099-DIV issued to C reporting the part
of the dividend allocated to C.
Example 3. WA, a withholding
agent, makes a withholdable payment
of U.S. source dividends to QI, a
Instructions for Form 1042-S (2015)

qualified intermediary that is a reporting
model 1 FFI. QI provides WA with a
valid Form W-8IMY with which it
associates a withholding statement that
allocates 40% of the payment to a
chapter 3, 15% withholding rate pool
and 40% to a chapter 3, 30%
withholding rate pool. QI does not
provide any withholding rate pool
information regarding the remaining
20% of the payment. WA must apply the
presumption rule to the part of the
payment (20%) that has not been
allocated. Under the presumption rules
of Regulations section 1.1471-3(f) for a
withholdable payment made to an
entity, 20% of the payment is treated as
paid to a nonparticipating FFI. WA must
complete three Forms 1042-S. First, a
Form 1042-S for dividends subject to
15% withholding, showing “00” in
box 3a (chapter 3 exemption code),
chapter 4 exemption code 15 (payee
not subject to chapter 4 withholding) in
box 4a, QI as the recipient in box 13d,
recipient code 12 (qualified
intermediary) as the chapter 3 status
code, and recipient code 07 (registered
deemed-compliant FFI-reporting model
1 FFI) as the chapter 4 status code
(because the payment is a withholdable
payment). Second, a Form 1042-S for
dividends subject to 30% withholding,
showing “00” in box 3a (chapter 3
exemption code), chapter 4 exemption
code 15 (payee not subject to chapter 4
withholding) in box 4a, QI as the
recipient in box 13d, recipient code 12
(qualified intermediary) as the chapter 3
status code, and recipient code 07
(registered deemed-compliant FFI –
reporting model 1 FFI) as the chapter 4
status code. Third, a Form 1042-S for
dividends subject to 30% withholding,
showing chapter 3 exemption code 12
(payee subjected to chapter 4
withholding), “00” in box 4a (chapter 4
exemption code), “Unknown Recipient”
as the recipient in box 13d and recipient
code 21 (unknown recipient) as the
chapter 3 status code and recipient
code 29 (unknown recipient) as the
chapter 4 status code. Also, QI's name,
country code, address, GIIN, and
QI-EIN must be entered in boxes 15a
through 15i.
Amounts paid to qualified securities
lenders. A withholding agent that
makes payments of substitute dividends
to a qualified securities lender (QSL)
should complete Form 1042-S treating
the QSL as the recipient. Use income
code 34. Use recipient code 13 or 14
(qualified securities lender – qualified
intermediary or qualified securities
lender – other) as the chapter 3 status
code.
Instructions for Form 1042-S (2015)

The withholding agent is not required
to withhold on a substitute dividend
payment if it receives, at least annually,
a certificate from the QSL that includes
a statement with the following
information:
The recipient of the substitute
dividend is a QSL, and
With respect to the substitute
dividend it receives from the withholding
agent, the QSL states that it will
withhold and remit or pay the proper
amount of U.S. gross-basis tax.
If the withholding agent receives a
certificate from the QSL that includes a
statement that contains the above
information, use exemption code 11.
If the QSL is also a QI with primary
withholding responsibility, use
exemption code 11 and not exemption
code 06 for chapter 3 purposes.
Amounts paid to certain U.S. branches. A U.S. withholding agent making a
payment to a U.S. branch of an FFI or
NFFE completes Form 1042-S as
follows:
If a withholding agent makes a
payment to a U.S. branch that has
provided the withholding agent with a
Form W-8IMY stating that it has agreed
to be treated as a U.S. person, the U.S.
withholding agent treats the U.S. branch
as the recipient.
If a withholding agent makes a
payment to a U.S. branch that has
provided a Form W-8IMY to transmit
information regarding its chapter 4
reporting pools when the payment is a
withholdable payment or the branch
provides a chapter 4 withholding rate
pool of U.S. payees and, to the extent
applicable, recipient specific information
for chapter 3 purposes, the U.S.
withholding agent must complete a
separate Form 1042-S for each
chapter 4 reporting pool treating the
U.S. branch as the recipient or, for
chapter 3 purposes, for each recipient
that is a foreign person whose
documentation is associated with the
U.S. branch's Form W-8IMY. If a
payment cannot be reliably associated
with recipient documentation, the U.S.
withholding agent must complete Form
1042-S in accordance with the
presumption rules.
If a withholding agent cannot reliably
associate a payment with a Form
W-8IMY from a U.S. branch, and if a
withholding agent has an EIN for the
branch, then the payment may be
reported on a single Form 1042-S
treating the U.S. branch as the recipient
and reporting the income as effectively
connected income.
-11-

Amounts paid to a foreign estate. If
a U.S. withholding agent makes a
payment to a foreign estate, a Form
1042-S must be completed showing the
estate as the recipient. Use recipient
code 17 (estate), as the chapter 3 status
code and the applicable recipient code
for the chapter 4 status code.
Dual claims. A U.S. withholding agent
may make a payment to a foreign entity
(for example, a hybrid entity) that is
simultaneously claiming an exemption
from chapter 4 withholding and a
reduced rate of tax under chapter 3 on
its own behalf for a part of the payment
and an exemption from chapter 4
withholding and a reduced rate of tax
under chapter 3 on behalf of persons in
their capacity as interest holders in that
entity on the remaining part. If the
claims are consistent and the
withholding agent has accepted the
multiple claims, a separate Form
1042-S must be filed for the entity for
those payments for which the entity is
treated as claiming a reduced rate of
withholding and separate Forms 1042-S
must be filed for each of the interest
holders for those payments for which
the interest holders are claiming a
reduced rate of withholding. The Forms
1042-S must include the chapter 4
status of the payee (including the
applicable chapter 4 exemption). If the
claims are consistent but the
withholding agent has not chosen to
accept the multiple claims, or if the
claims are inconsistent, a separate
Form 1042-S must be filed for the
person(s) being treated as the
recipient(s).
Special instructions for U.S. trusts
and estates. Report the entire amount
of income subject to reporting,
regardless of estimates of distributable
net income.

Payments Made to Persons
Who Are Not Recipients
Disregarded entities. If a U.S.
withholding agent makes a payment to a
disregarded entity (other than a limited
branch of an FFI) that is not a hybrid
entity making a treaty claim, and
receives a valid Form W-8BEN-E or
W-8ECI from a foreign person that is the
single owner of the disregarded entity,
the withholding agent must file a Form
1042-S in the name of the foreign single
owner. The taxpayer identifying number
(TIN) on the Form 1042-S, if required,
must be the foreign single owner's TIN.
However, in box 13h include the GIIN of
the disregarded entity provided in Part II
of Form W-8BEN-E if it is an FFI.

Example. WA, a withholding agent,
makes a withholdable payment of
interest to LLC, a foreign limited liability
company that is not an FFI. LLC is
wholly-owned by FC, a foreign
corporation that is an excepted
non-financial foreign entity. LLC is
treated as a disregarded entity. WA has
a Form W-8BEN-E from FC on which it
states that it is the beneficial owner of
the income paid to LLC. WA reports the
interest payment on Form 1042-S
showing FC as the recipient. The result
would be the same if LLC was a
domestic entity.
A disregarded entity can, however,
claim to be the beneficial owner of a
payment if it is a hybrid entity claiming
treaty benefits. See Form W-8BEN-E
and its instructions for more information.
If a disregarded entity claims on a valid
Form W-8BEN-E to be the beneficial
owner, the U.S. withholding agent must
complete a Form 1042-S treating the
disregarded entity as a recipient and
using recipient code 26 (hybrid entity
making a treaty claim) as the chapter 3
status code and the applicable recipient
code for the chapter 4 status code of the
single owner when the payment is a
withholdable payment and chapter 4
withholding does not apply.
Amounts paid to a nonqualified intermediary or flow-through entity. If
a U.S. withholding agent makes a
payment to an NQI or a flow-through
entity (other than a nonparticipating FFI)
with respect to a withholdable payment,
it must complete a separate Form
1042-S for each recipient on whose
behalf the NQI or flow-through entity
acts as indicated by its withholding
statement and the documentation
associated with its Form W-8IMY. If a
payment is made through tiers of NQIs
or flow-through entities, the withholding
agent must nevertheless complete Form
1042-S for the recipients to which the
payments are remitted. A withholding
agent completing Form 1042-S for a
recipient that receives a payment
through an NQI or a flow-through entity
must include in boxes 15a through 15i
of Form 1042-S the name, country
code, address, TIN, if any, and GIIN, if
any, of the NQI or flow-through entity
from whom the recipient directly
receives the payment.
If, however, a U.S. withholding agent
makes withholdable payments to an
NQI or a flow-through entity that is a
participating FFI or registered
deemed-compliant FFI that is allocable
to a chapter 4 withholding rate pool as
indicated by the FFI’s withholding
statement, the U.S. withholding agent

should complete a separate Form
1042-S for each chapter 4 reporting
pool (i.e., pool of recalcitrant account
holders, pool of nonparticipating FFIs,
pool of payees that are U.S. persons)
treating the participating FFI or
registered deemed-compliant FFI as the
recipient and must include the GIIN of
the FFI and the applicable chapter 4
reporting pool code as the chapter 4
status code. If a payment is made
through tiers of NQIs or flow-through
entities that are participating FFIs or
registered deemed-compliant FFIs, the
withholding agent must nevertheless
complete Form 1042-S for each
chapter 4 reporting pool to which the
payments are allocated and must
report, as the recipient, the FFI from
whom the recipients included in the
chapter 4 reporting pool directly receive
the payment.
Example. WA, a withholding agent,
makes a withholdable payment of
interest to FFI 1, a reporting model 1
FFI. FFI 1 provides WA with a valid
Form W-8IMY with which it associates a
withholding statement that allocates
80% of the payment to FFI 2, a
participating FFI, and 20% of the
payment to a pool of nonparticipating
FFIs. FFI 1 also provides WA with FFI
2's Form W-8IMY with which it
associates a withholding statement that
allocates 100% of the payment to
recalcitrant pool-no U.S. indicia. WA
must complete a Form 1042-S for the
interest allocated to a pool of
nonparticipating FFIs with FFI 1 as the
recipient and must complete another
Form 1042-S for the interest allocated to
a pool of recalcitrant account holders-no
U.S. indicia with FFI 2 as the recipient.
If a U.S. withholding agent makes
withholdable payments to an NQI or
flow-through entity that is a participating
FFI or deemed-compliant FFI, and
cannot reliably associate the payment,
or any part of the payment, with a
withholding statement, or to the extent
required, a valid withholding certificate
(Forms W-8 or W-9) or other valid
appropriate documentation from a
recipient, the withholding agent must
follow the appropriate presumption rules
for that payment. For this purpose, if the
allocation information provided to the
withholding agent indicates an
allocation of more than 100% of the
payment, then no part of the payment
should be considered to be associated
with a Form W-8, Form W-9, or other
appropriate documentation. The Form
1042-S should be completed by
entering “Unknown Recipient” in
box 13d and recipient code 21
-12-

(unknown recipient) as the chapter 3
status code and recipient code 29
(unknown recipient) as the chapter 4
status code. Also, the name, country
code, address, GIIN, if any, and TIN, if
any, of the FFI should be entered in
boxes 15a through 15i.
If a U.S. withholding agent makes
withholdable payments to an NQI or
flow-through entity that is a
nonparticipating FFI, the withholding
agent must treat the payment as made
to an unknown recipient regardless of
whether it can reliably associate the
payment, or any part of the payment,
with a valid withholding certificate
(Forms W-8 or W-9) or other valid
appropriate documentation from a
recipient (see Regulations section
1.1471-3(d)(8)). The withholding agent
should complete a Form 1042-S
showing “Unknown Recipient” in
box 13d and recipient code 21
(unknown recipient) as the chapter 3
status code and recipient code 29
(unknown recipient) as the chapter 4
status code. Also, the name, country
code, address, chapter 4 status, and
TIN, if any, of the nonparticipating FFI
should be entered on Form 1042-S in
boxes 15a through 15i.
If, however, an NQI or flow-through
entity that is a nonparticipating FFI
provides documentation described in
Regulations section 1.1471-3(d)(8)(ii) to
establish that the withholdable payment
or a portion of the payment is
beneficially owned by an exempt
beneficial owner, then the withholding
agent should complete a Form 1042-S
for each exempt beneficial owner
showing the chapter 4 exemption code
15 (payee not subject to chapter 4
withholding), the exempt beneficial
owner as the recipient in box 13d, and
the name, country code, address,
chapter 4 status, and TIN, if any, of the
nonparticipating FFI in boxes 15a
through 15i. For any remaining portion
of the payment, the withholding agent
should complete a Form 1042-S to an
unknown recipient as described directly
above.
Pro-rata reporting. If the
withholding agent has agreed that an
NQI (other than a nonparticipating FFI)
may provide information allocating a
payment to its account holders under
the alternative procedure of Regulations
section 1.1441-1(e)(3)(iv)(D) (no later
than February 14, 2016) and the NQI
fails to allocate more than 10% of the
payment in a withholding rate pool to
the specific recipients in the pool or an
applicable chapter 4 withholding rate
pool, the withholding agent must file
Instructions for Form 1042-S (2015)

Forms 1042-S for each recipient in the
pool on a pro-rata basis. If, however, the
NQI fails to timely allocate 10% or less
of the payment in a withholding rate
pool to the specific recipients in a pool,
the withholding agent must file Forms
1042-S for each recipient for which it
has allocation information and report the
unallocated part of the payment on a
Form 1042-S in accordance with the
presumption rules.

nonparticipating FFI. A Form 1042-S
should be completed by entering
“Unknown Recipient” in box 13d and
recipient code 21 (unknown recipient)
as the chapter 3 status code and
recipient code 29 (unknown recipient)
as the chapter 4 status code. Also, the
name, country code, address, and TIN,
if any, of the certified deemed-compliant
FFI should be entered in box 15a
through 15i.

Payments allocated, or presumed
made, to U.S. non-exempt recipients.
You may be given Forms W-9 or other
information regarding U.S. non-exempt
recipients from an NQI or flow-through
entity together with information
allocating all or a part of the payment to
U.S. non-exempt recipients. You must
report income allocable to a U.S.
non-exempt recipient on the appropriate
Form 1099 and not on Form 1042-S,
even though you are paying that income
to an NQI or a flow-through entity. If,
however, a participating FFI or
registered deemed-compliant FFI
provides a withholding statement
allocating all or part of the payment to a
chapter 4 withholding rate pool of U.S.
payees along with the certification
provided on Form W-8IMY required for
reporting such pool (as described in
Regulations section 1.1471-3(c)(3)(iii)
(B)), you must report the income
allocable to such pool on Form 1042-S.

Example 6. The facts are the same
as Example 5 except that FP is a
participating FFI and provides WA with
a Form W-8IMY certifying that it is
reporting its U.S. accounts under
chapter 4 and a withholding statement
allocating 100% of the payment to a
pool of U.S. payees. WA must file one
Form 1042-S showing FP as the
recipient in box 13d and must include
FP's GIIN and recipient code 48 (U.S.
payees pool) as the chapter 4 status
code. WA should check box 4 and leave
boxes 3a and 3b blank.

Specified Federal Procurement
Payments Made to Foreign
Persons

For purposes of section 5000C, a payor
of a specified Federal procurement
payment to a foreign person must
complete a Form 1042-S for payments
withheld upon in the name of the foreign
person. Use income code 44 to report
payments subject to withholding under
section 5000C. Box 2 should include the
amount of the specified Federal
procurement payments subject to
withholding and Box 7 should include
the amount of tax withheld under
section 5000C.

Example 4. FP is a nonwithholding
foreign partnership (flow-through entity)
that is a certified deemed-compliant FFI.
FP receives from WA, a U.S.
withholding agent, a withholdable
payment of interest described by
income code 01 (interest paid by U.S.
obligors – general). FP has three
partners, A, B, and C, all of whom are
individuals. FP provides WA with a
Form W-8IMY certifying that it is
transmitting Forms W-9 for U.S.
non-exempt recipients and Forms
W-8BEN from A and B and a Form W-9
from C, a U.S. non-exempt recipient. In
addition, FP provides a complete
withholding statement in association
with its Form W-8IMY that allocates the
interest payments among A, B, and C.
WA must file two Forms 1042-S, one
each for A and B, and a Form 1099-INT
for C.

Amounts Paid by
Qualified Intermediaries

Example 5. The facts are the same
as in Example 4, except that FP does
not provide any documentation from its
partners. Because WA cannot reliably
associate the withholdable payment of
interest with documentation from a
payee, it must apply the presumption
rules of Regulations section 1.1471-3(f)
to treat the interest as paid to a

In general. For purposes of chapter 4,
a QI must complete a Form 1042-S for
payments withheld under chapter 4
determined in accordance with the
income codes used to file Form 1042-S.
A QI that is a participating FFI or
registered deemed-compliant FFI may
use the chapter 4 pooled reporting
codes 42 through 49 to allocate

Instructions for Form 1042-S (2015)

If you are reporting tax withheld
under section 5000C, check box 3 as if
the tax were a chapter 3 tax, enter “00”
in box 3a, and report the tax withheld in
box 7. You do not need to complete
box 4a, 4b, or any box for a chapter 3 or
4 status code. On boxes 13d through
13g, include the name and the address
of the foreign person withheld upon. If
known, include the TIN (if any) in
box 13a.

-13-

payments made to its recalcitrant
account holders, payees that are
nonparticipating FFIs, and payees that
are U.S. persons. A QI should not be
using chapter 4 reporting pool 49 (QI‐
Recalcitrant Pool‐ General) to report its
accounts but may use it to report
accounts maintained by another QI. A
QI that is an NFFE or an FFI treated as
deemed-compliant under an applicable
IGA (as described in Regulations
section 1.1441-1(e)(5)(ii)(A)) may use
chapter 4 reporting pool code 47 to
report payments allocable to a pool of
nonparticipating FFIs. QI may also use
the chapter 4 pooled reporting codes to
report payments allocable to account
holders, payees, or owners of another
participating FFI or registered
deemed-compliant FFI that is an NQI,
NWP, or NWT and provides its
chapter 4 withholding rate pools on its
withholding statement. In such case, the
QI must include the NQI, NWP, or NWT
as the recipient in box 13d. For
payments that are exempt from
chapter 4 withholding, and made by the
QI directly to foreign beneficial owners
(or that are treated as paid directly to
beneficial owners), the QI may report on
the basis of chapter 3 reporting pools, in
most cases. A QI may not report on the
basis of reporting pools in the
circumstances described in
Recipient-by-Recipient Reporting, later.
For payments not subject to chapter 4
withholding, a QI may use a single
chapter 4 exemption code 15 (payee
not subject to chapter 4 withholding)
and a single chapter 3 reporting pool
code 27 (Withholding rate pool –
general) as the chapter 3 status code
for all reporting pools, except for
amounts paid to foreign tax-exempt
recipients for which chapter 3 reporting
pool code 28 should be used. Note,
however, that a QI should use recipient
code 28 only for pooled account holders
that have claimed an exemption based
on their tax-exempt status and not some
other exemption (tax treaty or other
Code).
Example 7. QI, a qualified
intermediary and participating FFI, has
four direct account holders, A and B,
foreign individuals, and X and Y, foreign
corporations. The withholdable
payments made to these direct account
holders are exempt from chapter 4
withholding because of the chapter 4
status of each account holder. A and X
are residents of a country with which the
United States has an income tax treaty
and have provided documentation that
establishes that they are entitled to a
lower treaty rate of 15% on withholding
of dividends from U.S. sources. B and Y

are not residents of a treaty country and
are subject to 30% withholding on
dividends. QI receives U.S. source
dividends on behalf of its four
customers. QI must file one Form
1042-S for the 15% withholding rate
pool. This Form 1042-S must show
income code 06 (dividends paid by U.S.
corporations – general) in box 1, “15.00”
in box 3b (chapter 3 tax rate), chapter 4
exemption code 15 (payee not subject
to chapter 4 withholding) in box 4a,
“00.00” in box 4b (chapter 4 tax rate),
“Withholding rate pool” in box 13d
(recipient's name), and chapter 3
reporting pool code 27 (withholding rate
pool – general) as the chapter 3 status
code. QI also must file one Form 1042-S
for the 30% withholding rate pool that
contains the same information as the
Form 1042-S filed for the 15%
withholding rate pool, except that it will
show “30.00” in box 3b (chapter 3 tax
rate).
Example 8. The facts are the same
as in Example 7, except that Y is an
organization that has tax-exempt status
in the United States and in the country in
which it is located, and B is a
recalcitrant account holder with U.S.
indicia. QI must file three Forms 1042-S.
One Form 1042-S (for amounts
allocable for A and X) will contain the
same information as in Example 7. The
second Form 1042-S (for amounts
allocable to Y) will contain information
for the withholding rate pool consisting
of the amounts paid to Y. This Form
1042-S will show income code 06
(dividends paid by U.S. corporations –
general) in box 1, exemption code 02
(exempt under IRC (other than portfolio
interest)) in box 3a, “00.00” in box 3b
(chapter 3 tax rate), chapter 4
exemption code 15 (payee not subject
to chapter 4 withholding) in box 4a,
“00.00” in box 4b (chapter 4 tax rate),
“Zero rate withholding pool-exempt
organizations,” or similar designation, in
box 13d (recipient's name), and
chapter 3 code 28 (withholding rate pool
– exempt organization) in box 13b. The
third Form 1042-S will contain
information for the recalcitrant pool
consisting of amounts paid to B. This
Form 1042-S will show income code 06
(dividends paid by U.S.
corporations-general) in box 1,
exemption code 12 (payee subjected to
chapter 4 withholding) in box 3a, “00.00”
in box 3b (tax rate), “00” in box 4a
(chapter 4 exemption code), “30.00” in
box 4b (chapter 4 tax rate), “recalcitrant
pool – U.S. indicia” or similar
designation, in box 13d (recipient's
name), and chapter 4 recipient code 43

(recalcitrant pool-U.S. indicia) as the
chapter 4 status code in box 13c.
Under the terms of its Qualified
Intermediary (or QI) agreement
CAUTION
with the IRS, a QI that is an FFI
may be required to report the amounts
paid to U.S. non-exempt recipients on
Form 1099 or Form 8966 using the
name, address, and TIN of the payee to
the extent those items of information are
known. These amounts must be
reported on Form 1042-S if allocated to
a chapter 4 withholding rate pool of U.S.
payees.

!

Amounts Paid to Private
Arrangement Intermediaries

In most cases, a QI must report
payments made to each private
arrangement intermediary (PAI)
(defined earlier in Definitions) as if the
PAI's direct account holders were its
own. For purposes of chapter 4, a QI
that is a participating FFI, registered
deemed-compliant FFI, or an FFI
treated as deemed-compliant under an
applicable IGA (as described in
Regulations section 1.1441-1(e)(5)(ii)
(A)) may use the chapter 4 reporting
pool code 47 to allocate payments
made to the PAI's payees that are
nonparticipating FFIs, and may treat the
PAI as the recipient on Form 1042-S
with respect to each such pool. For
chapter 3 purposes, if the payment is
made directly by the PAI to the recipient,
the QI may report the payment on a
pooled basis. A separate Form 1042-S
is required for each withholding rate
pool of each PAI. However, the QI must
include the name and address of the
PAI and use reporting pool code 29 or
30 (PAI withholding rate pool – general
and PAI-withholding rate pool-exempt
organization) as the chapter 3 status
code. If the PAI is providing recipient
information from an NQI or flow-through
entity, the QI may not report the
payments on a pooled basis for
chapter 3 purposes. Instead, it must
follow the same procedures as a U.S.
withholding agent making a payment to
an NQI or flow-through entity.
Example. QI, a qualified
intermediary, pays U.S. source
dividends to direct account holders that
are foreign persons and beneficial
owners. It also pays a part of the U.S.
source dividends to two private
arrangement intermediaries, PAI1 and
PAI2. The private arrangement
intermediaries pay the dividends they
receive from QI to foreign persons that
are beneficial owners and direct
account holders of PAI1 or PAI2. All
payees are exempt from chapter 4
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withholding and the dividends paid are
subject to a 15% rate of withholding. QI
must file a Form 1042-S for the
dividends paid to its own direct account
holders that are beneficial owners. QI
also must file two Forms 1042-S, one for
the dividends paid to the direct account
holders of each of PAI1 and PAI2. Each
of the Forms 1042-S that QI files for
payments made to PAI1 and PAI2 must
contain the name and address of PAI1
or PAI2 and recipient code 29 (PAI
withholding rate pool – general) as the
chapter 3 status code.

Amounts Paid to
Certain Partnerships
and Trusts

A QI that is applying the special pool
reporting allowance provided in the QI
agreement for certain partnerships or
trusts (Joint Account or Agency Option)
must file separate Forms 1042-S
reflecting reporting pools for each
partnership or trust that has provided
reporting pool information in its
withholding statement. For purposes of
chapter 4, a QI that is a participating FFI
or registered deemed-compliant FFI
may use the chapter 4 reporting pool
code 47 to allocate payments made to
the partnership or trust's payees that are
nonparticipating FFIs, and may treat the
partnership or trust as the recipient on
Form 1042-S. For chapter 3 purposes, if
the payment is made directly by the
partnership or trust to the recipient, the
QI may use reporting pool code 31
(Agency withholding rate pool general), 32 (Agency withholding rate
pool - exempt organization), or 33 (Joint
account withholding rate pool) as the
chapter 3 status code. However, to the
extent required in the QI agreement, the
QI must file separate Forms 1042-S for
partners, beneficiaries, or owners of
such partnership or trust that are
indirect partners, beneficiaries, or
owners, and for direct partners,
beneficiaries, or owners of such
partnership or trust that are
intermediaries or flow-through entities.

Recipient-by-Recipient
Reporting

If a QI is not permitted to report on the
basis of reporting pools, it must follow
the same rules that apply to a U.S.
withholding agent. For chapter 3
purposes, a QI may not report the
following payments on a reporting pool
basis, but rather must complete Form
1042-S for each appropriate recipient
and must provide the applicable
chapter 4 exemption code.

Instructions for Form 1042-S (2015)

Payments made to another QI, QSL,
WP, or WT. The QI must complete a
Form 1042-S treating the other QI, QSL,
WP, or WT as the recipient.
Payments made to an NQI (including
an NQI that is an account holder of a
PAI). For chapter 3 purposes, the QI
must complete a Form 1042-S for each
recipient who receives the payment
from the NQI. A QI that is completing
Form 1042-S for a recipient that
receives a payment through an NQI
must include in boxes 15a through 15i
the name, country code, address, TIN, if
any, and GIIN, if any, of the NQI from
whom the recipient directly receives the
payment. In the case of an NQI that is a
participating FFI or registered
deemed-compliant FFI, the QI must
complete a Form 1042-S for the
chapter 4 withholding rate pool of the
NQI provided in a withholding statement
associated with its Form W-8IMY and
must report the NQI as the recipient. In
such a case, the QI must include the
name and address of the NQI as the
recipient and use chapter 4 pool
reporting codes 42 through 49 as the
chapter 4 status code. If the NQI fails to
provide sufficient allocation information
with respect to a withholdable payment,
the QI must complete a Form 1042-S
with the recipient as "Unknown
Recipient" using reporting pool code 29
(unknown recipient) and must include
the NQI's information (name, address,
country code, TIN, if any, and GIIN) in
boxes 15a through 15i.
Example 1. QI, a qualified
intermediary, has NQI, a nonqualified
intermediary that is a participating FFI,
as an account holder. NQI has two
account holders, A and B, both
recalcitrant account holders with U.S.
indicia who receive a withholdable
payment of U.S. source dividends from
QI. NQI provides QI with a valid Form
W-8IMY and a complete withholding
statement that allocates the dividends
paid to NQI to recalcitrant pool- U.S.
indicia for both A and B. QI must
complete one Form 1042-S reporting
NQI as the recipient and using reporting
pool code 43 (recalcitrant pool – U.S.
indicia) as the chapter 4 status code.
Example 2. QI has NQI, a
nonqualified intermediary that is a
reporting model 2 FFI, as an account
holder. NQI has two account holders, A
and B, who receive a withholdable
payment of U.S. source dividends from
QI. A is a nonparticipating FFI. NQI
treats B as a non-consenting U.S.
account under the applicable IGA and is
not required to withhold on payments to
Instructions for Form 1042-S (2015)

B under chapter 4. NQI provides QI with
a valid Form W-8IMY and a complete
withholding statement that allocates
50% of the dividends paid to A and 50%
to B. NQI designates B as a individual
exempt from withholding under an IGA
but cannot include B in a chapter 4
withholding rate pool of U.S. payees
because the payment is subject to
chapter 3 withholding and under the
presumption rules of Regulations
section 1.1441-1(b)(3) the payment is
presumed made to an unknown,
undocumented foreign payee. QI must
complete two Forms 1042-S. One Form
1042-S showing NQI as the recipient
and using reporting pool code 47
(nonparticipating FFI pool). The second
Form 1042-S showing the recipient as
“Unknown Recipient” and NQI in
box 15a-15i with chapter 4 exemption
code 19 (exempt from withholding
under IGA) and 30% withholding under
chapter 3 for the payment allocated to B
as a presumed foreign person under
chapter 3.
Payments made to a flow-through
entity. The QI must complete a Form
1042-S for each recipient who receives
the payment from the flow-through
entity. A QI that is completing a Form
1042-S for a recipient that receives a
payment through a flow-through entity
must include in boxes 15a through 15i
the name, country code, address, GIIN,
if any, and TIN, if any, of the
flow-through entity from which the
recipient directly receives the payment.
For chapter 4 purposes and in the
case of a flow-through entity that is a
participating FFI or registered
deemed-compliant FFI (other than a WP
or WT), the QI must complete a Form
1042-S for each chapter 4 withholding
rate pool provided in the withholding
statement associated with the Form
W-8IMY of the flow-through entity. The
QI must include the name, address, and
GIIN of the flow-through entity as the
recipient and use pooled reporting
codes 42 through 49 as the chapter 4
status code.
Example. QI, a qualified
intermediary, has FP, a nonwithholding
foreign partnership that is a registered
deemed-compliant FFI, as an account
holder. QI pays interest that is a
withholdable payment described by
income code 01 (interest paid by U.S.
obligors – general) to FP. FP has three
partners, A, B, and C, all of whom are
exempt from withholding under
chapter 4. FP provides QI with a Form
W-8IMY with which it associates the
Forms W-8BEN from each of A, B, and
C. In addition, FP provides a complete
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withholding statement in association
with its Form W-8IMY that allocates the
interest payments among A, B, and C.
QI must file three Forms 1042-S, one
each for A, B, and C. The Forms 1042-S
must show information relating to FP in
boxes 15a through 15i along with the
chapter 4 status and exemption code for
A, B, and C.

Amounts Paid by
Withholding Foreign
Partnerships and Trusts
In general. For chapter 4 purposes,
payments that are made by a
withholding foreign partnership (WP) or
withholding foreign trust (WT) that is an
FFI directly to its partners, owners, or
beneficiaries that are recalcitrant
account holders, payees that are
nonparticipating FFIs, and payees that
are U.S. persons may be reported on
the basis of chapter 4 reporting pools. A
WP or WT may also use the chapter 4
pooled reporting codes to report
payments allocable to account holders,
payees, or owners of another
participating FFI or registered
deemed-compliant FFI that is an NQI,
NWP, or NWT and provides its
chapter 4 withholding rate pools on its
withholding statement when the WP or
WT applies section 9.03 of its
Agreement to such entity. In such case,
the WP or WT must include the NQI,
NWP, or NWT as the recipient in
box 13d. If a WP or WT has not made a
pooled reporting election, for chapter 3
purposes, a WP or WT must file a
separate Form 1042-S for each direct
partner, beneficiary, or owner that is
exempt from chapter 4 withholding and
to whom the WP or WT distributes, or in
whose distributive share is included, an
amount subject to withholding under
chapter 3, in the same manner as a U.S.
withholding agent. However, if the WP
or WT has made a pooled reporting
election in its WP or WT agreement, the
WP or WT may instead report payments
to such direct partners, beneficiaries, or
owners on the basis of chapter 3
reporting pools and file a separate Form
1042-S for each reporting pool. For
payments not subject to chapter 4
withholding, a WP or WT may use a
single chapter 4 exemption code 15
(payee not subject to chapter 4
withholding) and a single chapter 3
reporting pool code 27 (withholding rate
pool – general) as the chapter 3 status
code for all chapter 3 reporting pools,
except for amounts paid to foreign
tax-exempt recipients for which a
separate recipient code 28 must be
used. For this purpose, a foreign

tax-exempt recipient includes any
organization that is not subject to
withholding and is not liable to tax in its
country of residence because it is a
charitable organization, pension fund, or
foreign government. See the WP and
WT agreements for when a WP and WT
can pool report payments to an indirect
partner, beneficiary, or owner. See
section 9 of the WP or WT Agreement.

Amounts Paid
by Nonqualified
Intermediaries and
Flow-Through Entities

An NQI and a flow-through entity are
withholding agents and must file Forms
1042-S for amounts paid to recipients.
However, an NQI or flow-through entity
is not required to file Form 1042-S if it is
not required to file Form 1042-S under
the Multiple Withholding Agent Rule,
later. An NQI or flow-through entity may
report payments made to recipients to
the extent it has failed to provide to
another withholding agent the
appropriate documentation and
complete withholding statement for
either chapter 3 or 4 purposes. If the
NQI or flow-through entity chooses to or
must file Form 1042-S, as described
above, the NQI or flow-through entity
must also file Form 1042 and, if
applicable, attach the Form 1042-S it
received from the withholding agent to
establish any credit for amounts
withheld by the withholding agent. See
Instructions for Form 1042.
If another withholding agent has
withheld tax on an amount that should
have been exempt (for example, where
the withholding agent applied the
presumption rules because it did not
receive proper documentation or other
required information from the NQI or
flow-through entity), and the payee or
beneficial owner will make a claim for
refund, the NQI or flow-through entity
must report on Form 1042-S the correct
tax rate and the combined amount of
U.S. federal tax withheld with respect to
the recipient and should enter the
applicable chapter 3 and 4 exemption
codes.
If another withholding agent
underwithholds, even though it received
proper documentation from the NQI or
flow-through entity, the NQI or
flow-through entity must withhold
additional amounts to bring the total
withholding to the correct amount.

Multiple Withholding
Agent Rule

A withholding agent is not required to
file Form 1042-S if a return is filed by
another withholding agent reporting the
same amount and the withholding agent
has withheld correctly.
The multiple withholding agent rule
does not relieve withholding agents
from Form 1042-S reporting
responsibility in the following
circumstances.
Any withholding agent making a
payment to a QI, QSL, WP, or WT must
report that payment as made to the QI,
QSL, WP, or WT.
Any withholding agent making a
payment to a U.S. branch treated as a
U.S. person must report the payment as
made to that branch.
Any withholding agent that withholds
an amount from a payment under
chapters 3 or 4 must report that amount
to the recipient from whom it was
withheld.
Furthermore, the multiple withholding
agent rule does not relieve the following
from Form 1042-S reporting
responsibility.
Any QI, WP, or WT required to report
an amount to chapter 4 withholding rate
pool or chapter 3 withholding rate pool.
An NQI or flow-through entity that
knows, or has reason to know, that the
correct amount has not been withheld
by another withholding agent.
Under the multiple withholding agent
rule, a withholding agent reporting
amounts withheld by another
withholding agent must use box 8 (Tax
withheld by other agents) to report such
amounts and must provide the name
and EIN of the withholding agent that
withheld in boxes 14a and 14b (Primary
Withholding Agent's Name and EIN).
Example 1. NQI, a foreign bank that
is a participating FFI, acts as a
nonqualified intermediary for four
different foreign persons (A, B, C, and
D) who own securities from which they
receive interest that is a withholdable
payment. The interest is paid by a U.S.
withholding agent (WA) as custodian of
the securities for NQI. A, B, C, and D
each own a 25% interest in the
securities. NQI has furnished WA a
Form W-8IMY to which it certifies its
status as a participating FFI and has
attached Forms W-8BEN from A and B.
NQI's Form W-8IMY contains an
attachment stating that 25% of the
securities are allocable to each of A and
B, and 50% to a pool of recalcitrant
account holders with U.S. indicia. WA
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pays $100 of interest during the
calendar year. WA treats the $25 of
interest allocable to A and the $25 of
interest allocable to B as portfolio
interest and completes Forms 1042-S
for A and for B as the recipients. WA
includes information relating to NQI in
boxes 15a through 15i on the Forms
1042-S for A and B. WA subjects the
remaining $50 of interest to 30%
withholding under chapter 4 and reports
the interest on a Form 1042-S by
treating NQI as the recipient in box 13d
(using reporting pool code 43
(recalcitrant pool – U.S. indicia) as the
chapter 4 status code, “30.00” in box 4b
(chapter 4 tax rate), and $15 as the
amount withheld in box 7 and box 10.
Under the multiple withholding agent
rule, NQI is not required to file a Form
1042-S, but must file a Form 1042-S if,
for example, C and D seek to make a
claim for refund and NQI has not filed a
collective refund claim on behalf of C
and D for the tax withheld under
chapter 4 on the payment (see
Regulations section 1.1471-4(h)).
Example 2. WA, a U.S. withholding
agent, makes a $100 dividend payment
that is a withholdable payment to a
foreign bank (NQI) that is a participating
FFI and acts as a nonqualified
intermediary. NQI receives the payment
on behalf of A, documented as a foreign
individual exempt from chapter 4
withholding and a resident of a treaty
country who is entitled to a 15% rate of
withholding under chapter 3, and B,
documented as a foreign individual
exempt from chapter 4 withholding and
a resident of a country that does not
have a tax treaty with the United States
and who is subject to 30% withholding
under chapter 3. NQI provides WA with
its Form W-8IMY that certifies its status
as a participating FFI to which it
associates the Forms W-8BEN from
both A and B and a complete
withholding statement that allocates
50% of the dividend to A and 50% to B.
A's Form W-8BEN claims a 15% treaty
rate of withholding. B's Form W-8BEN
does not claim a reduced rate of
withholding. WA, however, mistakenly
withholds only 15%, $15, from the entire
$100 payment. WA completes a Form
1042-S for each A and B as the
recipients, showing on each form $50 of
dividends in box 2, a withholding rate of
“15.00” in box 3b (chapter 3 tax rate),
and $7.50 as the amount withheld in
boxes 7 and 10. Under the multiple
withholding agent rule, NQI is not
required to file a Form 1042-S for A.
However, because NQI knows (or
should know) that B is subject to a 30%
rate of withholding, and assuming it
Instructions for Form 1042-S (2015)

knows that WA only withheld 15%, the
multiple withholding agent rule does not
apply to the dividend paid to B, and NQI
must withhold an additional 15% from
the payment to B. NQI then must file a
Form 1042-S for B showing $50 of
dividends in box 2, “00” in box 3a
(chapter 3 exemption code), “30.00” in
box 3b (the correct chapter 3 tax rate),
$7.50 withheld by NQI in box 7, $7.50
withheld by WA in box 8, and $15 in
box 10 (the combined amount withheld).
NQI also must enter chapter 4
exemption code 15 (payee not subject
to chapter 4 withholding) in box 4a and
“00.00” in box 4b (chapter 4 tax rate).
See the instructions for box 3a, later.

Penalties

The following penalties apply to the
person required to file Form 1042-S.
The penalties apply to both paper filers
and electronic filers.
Late filing of correct Form 1042-S. A
penalty may be imposed for failure to file
each correct and complete Form
1042-S when due (including
extensions), unless you can show that
the failure was due to reasonable cause
and not willful neglect. The penalty,
based on when you file a correct Form
1042-S, is:
$30 per Form 1042-S if you correctly
file within 30 days after the required
filing date; the maximum penalty is
$250,000 per year ($75,000 for a small
business). A small business, for this
purpose, is defined as having average
annual gross receipts of $5 million or
less for the 3 most recent tax years (or
for the period of its existence, if shorter)
ending before the calendar year in
which the Forms 1042-S are due.
$60 per Form 1042-S if you correctly
file more than 30 days after the due date
but by August 1; the maximum penalty
is $500,000 per year ($200,000 for a
small business).
$100 per Form 1042-S if you file after
August 1 or you do not file correct
Forms 1042-S; the maximum penalty is
$1,500,000 per year ($500,000 for a
small business).
If you intentionally disregard the
requirement to report correct
information, the penalty per Form
1042-S is increased to the greater of
$250 or 10% of the total amount of
items required to be reported, with no
maximum penalty.
Failure to furnish correct Form
1042-S to recipient. If you fail to
provide statements to recipients and
cannot show reasonable cause, a
penalty of up to $100 may be imposed
Instructions for Form 1042-S (2015)

for each failure to furnish Form 1042-S
to the recipient when due. The penalty
also may be imposed for failure to
include all required information or for
furnishing incorrect information on Form
1042-S. The maximum penalty is
$1,500,000 for all failures to furnish
correct recipient statements during a
calendar year. If you provide the correct
statement on or before August 1,
reduced penalties similar to those for
failing to file a correct Form 1042-S with
the IRS may be imposed. See Late filing
of correct Form 1042-S., earlier. If you
intentionally disregard the requirement
to report correct information, each $100
penalty is increased to the greater of
$250 or 10% of the total amount of
items required to be reported, with no
maximum penalty.
Failure to file electronically. If you
are required to file electronically but fail
to do so, and you do not have an
approved waiver on record, penalties
may apply unless you establish
reasonable cause for your failure.

Avoid Common Errors

To ensure that your Forms 1042-S can
be correctly processed, be sure that
you:
Carefully read the information
provided in Pub. 515 and these
instructions.
Comply with the requirements in Pub.
1187 if you are an electronic filer.
Complete all required fields. At a
minimum, you must enter information in
boxes 1, 2, 7, 12a-f, 12h-i, and 13d.
Other boxes must be completed if the
nature of the payment requires it.
If the amount reported in box 2 is a
withholdable payment, you must enter
information in boxes 4a, 4b, 12c, and
13c. If the amount reported in box 2 is
an amount subject to chapter 3
withholding, you must enter information
in boxes 12b and 13b.
If you use chapter 4 exemption code
15, 17, 18, 19, or 20, you must provide a
chapter 4 status code for the recipient
(box 13c).
If the amount reported in box 2 is a
withholdable payment and an amount
subject to chapter 3 withholding and the
tax rate in box 4b is 00.00, you must
enter information in boxes 3a and 3b. If
the rate entered in box 4b is 30.00, you
may enter information in boxes 3a and
3b.
If you are a QI, WP, or WT that is pool
reporting for its direct account holders
only, a chapter 3 (box 13b) or chapter 4
status code (box 13c) is required.
If the recipient in box 13 or entity in
box 15 is a participating FFI, registered
-17-

deemed-compliant FFI, sponsored FFI,
direct reporting NFFE, or sponsored
direct reporting NFFE, you must enter
the entity's GIIN or the GIIN of the
sponsoring entity in box 13h or 15e.
Note. You may leave box 3b or 4b
blank if you are reporting a payment to
an artist or athlete and there is a central
withholding agreement. See Exception
for central withholding agreements in
the instructions for boxes 3b or 4b.
Use only income, status, and
exemption codes specifically listed in
these instructions.
Use only tax rates that are allowed by
statute, regulations, or treaty. Do not
attempt to “blend” rates. Instead, if
necessary, submit multiple Forms
1042-S to show changes in tax rate.
See the Valid Tax Rate Table, later.
All information you enter when
reporting the payment must correctly
reflect the intent of the statute and
regulations. In most cases, you should
rely on the withholding documentation
you have collected (Form W-8 series,
Form 8233, etc.) to complete your Form
1042-S submissions.
Also note the following:
The gross income you report in box 2
cannot be zero.
The income code you report in box 1
must correctly reflect the type of income
you pay to the recipient.
The withholding agent's name,
address, status codes, EIN, QI-EIN,
WP-EIN, WT-EIN, and GIIN, if any, must
be reported in boxes 12a-i.
The recipient's name, address, U.S.
TIN, if any, GIIN, if any, and country
code must be reported in boxes 13a,
and 13d-h. In most cases, you must
report a foreign address. See the
instructions for box 13, later.
The country code that you report in
boxes 13e and 15f must be present and
correctly coded and cannot be “US”
(unless the intermediary identified in
line 15 is a U.S. branch that is not
treated as a U.S. person). Additionally,
do not use “OC” or “UC” except as
specifically allowed in these
instructions.
For direct account holders, you must
report the recipient's account number in
box 16. You may also be required to
report the recipient's foreign TIN and
date of birth in boxes 13i and 17 (see
instructions for boxes 13i and 17, later).
The exemption code you report in
box 3a must correctly identify the proper
tax status for the type of income you pay
to the recipient. The exemption code
you report in box 4a must correctly
identify the proper tax status for the type

Income Codes
Box 1.

Enter the appropriate income code.

Code

16

Scholarship or fellowship grants

17
18
19
20
23
24

Compensation for independent personal services2
Compensation for dependent personal services2
Compensation for teaching2
Compensation during studying and training2
Gross income – Other
Real estate investment trust (REIT) distributions of capital gains

29
30

Interest paid by U.S. obligors – general
Interest paid on real property mortgages
Interest paid to controlling foreign corporations
Interest paid by foreign corporations
Interest on tax-free covenant bonds
Interest paid on deposit with a foreign branch of a
domestic corporation or partnership
Deposit interest
Original issue discount (OID)

25
26

31

Short-term OID

27

33
51

28

Code

Substitute payment – interest
Interest paid on certain actively traded or publicly offered
securities1
Dividend Income

Trust distributions subject to IRC section 1445
Unsevered growing crops and timber distributions by a trust
subject to IRC section 1445
Publicly traded partnership distributions subject to IRC section
1446
Gambling winnings3

06
07
08

Dividends paid by U.S. corporations – general
Dividends qualifying for direct dividend rate
Dividends paid by foreign corporations

32
35
36
37
38

21

Gross income-Capital gain dividend

39

34
40

Substitute payment – dividends
Other dividend equivalents under IRC section 871(m)
(formerly 871(l))
Dividends paid on certain actively traded or publicly
offered securities1
Substitute payments‐ dividends from certain actively
traded or publicly offered securities 1

41
42

01
02
03
04
05
22

52
53
Code
09
10
11
12
13
14
15

Interest Income

Other Income
Capital gains
Industrial royalties
Motion picture or television copyright royalties
Other royalties (for example, copyright, recording,
publishing)
Royalties paid on certain publicly offered securities1
Real property income and natural resources royalties
Pensions, annuities, alimony, and/or insurance premiums

Notional principal contract income4
Substitute payment – other
Capital gains distributions
Return of capital
Eligible deferred compensation items subject to IRC section
877A(d)(1)
Distributions from a nongrantor trust subject to IRC section 877A(f)
(1)
Guarantee of indebtedness
Earnings as an artist or athlete – no central withholding
agreement5

43

Earnings as an artist or athlete – central withholding agreement5

44
50
54

Specified Federal procurement payments
Income previously reported under escrow procedure6
Other income

1
This code should only be used if the income paid is described in §1.1441‐6(c)(2) and withholding agent has reduced the rate of withholding under
an income tax treaty without the recipient providing a U.S. or foreign TIN.

If compensation that otherwise would be covered under Income Codes 17 through 20 is directly attributable to the recipient's occupation as an
artist or athlete, use Income Code 42 or 43 instead.
Subject to 30% withholding rate unless the recipient is from one of the treaty countries listed under Gambling winnings (Income Code 28) in Pub.
515.
4
Use appropriate Interest Income Code for embedded interest in a notional principal contract.
5
If Income Code 42 or 43 is used, Recipient Code 22 (artist or athlete) should be used instead of Recipient Code 16 (individual), 15 (corporation), or
08 (partnership other than withholding foreign partnership).
6
Use only to report gross income the tax for which is being deposited in the current year because such tax was previously escrowed for chapters 3
and 4 and the withholding agent previously reported the gross income in a prior year and checked the box to report the tax as not deposited under
the escrow procedure. See the instructions to this form for further explanation.
2
3

-18-

Instructions for Form 1042-S (2015)

Exemption Codes and Recipient Codes
Boxes 3a
and 4a.

Exemption code (applies if the tax rate entered in
boxes 3b and 4b is 00.00).

04

Territory FI – not treated as U.S. Person

Code

Authority for Exemption

05

U.S. branch – treated as U.S. Person

06

U.S. branch – not treated as U.S. Person

07
08
09
10
11
12
13
14
15
16
17
18

U.S. branch – ECI presumption applied
Partnership other than Withholding Foreign Partnership
Withholding Foreign Partnership
Trust other than Withholding Foreign Trust
Withholding Foreign Trust
Qualified Intermediary
Qualified Securities Lender – Qualified Intermediary
Qualified Securities Lender – Other
Corporation
Individual
Estate
Private Foundation

19
20
21
22
23
24
25

Government or International Organization
Tax Exempt Organization (Section 501(c) entities)
Unknown Recipient
Artist or Athlete
Pension
Foreign Central Bank of Issue
Nonqualified Intermediary

26

Hybrid entity making Treaty Claim

Chapter 3
01
02
03
04
05
06
07
08
09
10
11
12

Effectively connected income
Exempt under IRC (other than portfolio interest)
Income is not from U.S. sources
Exempt under tax treaty
Portfolio interest exempt under IRC
QI that assumes primary withholding responsibility
WFP or WFT
U.S. branch treated as U.S. Person
Territory FI treated as U.S. Person
QI represents that income is exempt
QSL that assumes primary withholding responsibility
Payee subjected to chapter 4 withholding

Chapter 4
13
14
15
16
17
18
19
20
21
22

Grandfathered payment
Effectively connected income
Payee not subject to chapter 4 withholding
Excluded nonfinancial payment
Foreign Entity that assumes primary withholding
responsibility
U.S. Payees – of participating FFI or registered
deemed-compliant FFI
Exempt from withholding under IGA7
Dormant account8
Excluded payment on offshore obligation
Excluded Payments on Collateral9

Code

Type of Recipient, Withholding Agent, or
Intermediary

Chapter 3

Status Codes
Pooled Reporting Codes 10

01
02
03

U.S. Withholding Agent – FI
U.S. Withholding Agent – Other
Territory FI treated as U.S. Person

27
28
29
30
31
32
33

Withholding Rate Pool – General
Withholding Rate Pool – Exempt Organization
PAI Withholding Rate Pool – General
PAI Withholding Rate Pool – Exempt Organization
Agency Withholding Rate Pool – General
Agency Withholding Rate Pool – Exempt Organization
Joint Account Withholding Rate Pool

7

Use only to report a U.S. reportable account or non-consenting U.S. account that is receiving a payment subject to chapter 3 withholding.

8

Use only if applying the escrow procedure for dormant accounts under 1.1471‐4(b)(6). If tax is withheld and deposited under chapter 3, do not
check box “Check if tax not deposited with IRS pursuant to escrow procedure” and you must check box 3 and complete box 3b.

9

This code should only be used if the income paid is not subject to withholding under chapter 4 pursuant to 1.1473‐1(a)(4)(vii).

10

These codes should only be used by a QI, QSL, WP, or WT.

Instructions for Form 1042-S (2015)

-19-

Recipient Codes (continued)
Code

Type of Recipient, Withholding Agent, or
Intermediary
Chapter 4 Status Codes

25

Excepted Territory NFFE

26

Excepted NFFE – Other

01
02
03
04
05
06
07

27
28
29
30
31
32
33

Exempt Beneficial Owner
Entity Wholly Owned By Exempt Beneficial Owners
Unknown Recipient
Recalcitrant Account Holder
Nonreporting IGA FFI
Direct reporting NFFE
U.S. reportable account

34
35
36
37

Non – consenting U.S. account
Sponsored direct reporting NFFE
Excepted Inter-affiliate FFI
Undocumented Preexisting Obligation

38

US branch – ECI presumption applied

39
40

Account Holder of Excluded Financial Account 11
Passive NFFE reported by FFI 12

08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

U.S. Withholding Agent – FI
U.S. Withholding Agent – Other
Territory FI –not treated as U.S. Person
Territory FI – treated as U.S. Person
Participating FFI – Other
Participating FFI – Reporting Model 2 FFI
Registered Deemed-Compliant FFI – Reporting Model 1
FFI
Registered Deemed-Compliant FFI – Sponsored Entity
Registered Deemed-Compliant FFI – Other
Certified Deemed-Compliant FFI – Other
Certified Deemed-Compliant FFI – FFI with Low Value
Accounts
Certified Deemed-Compliant FFI – Non-Registering Local
Bank
Certified Deemed-Compliant FFI – Sponsored Entity
Certified Deemed-Compliant FFI – Investment Advisor or
Investment Manager
Nonparticipating FFI
Owner-Documented FFI
Limited Branch treated as Nonparticipating FFI
Limited FFI treated as Nonparticipating FFI
Passive NFFE identifying Substantial U.S. Owners
Passive NFFE with no Substantial U.S. Owners
Publicly Traded NFFE or Affiliate of Publicly Traded NFFE
Active NFFE
Individual
Section 501(c) Entities

41
NFFE subject to 1472 withholding
Pooled Reporting Codes
42
Recalcitrant Pool – No U.S. Indicia
43
Recalcitrant Pool – U.S. Indicia
44
Recalcitrant Pool – Dormant Account
45
Recalcitrant Pool – U.S. Persons
46
Recalcitrant Pool – Passive NFFEs
47
Nonparticipating FFI Pool
48
U.S. Payees Pool
49
QI‐ Recalcitrant Pool‐General 13

11
This code should only be used if income is paid to an account that is excluded from the definition of financial account under 1.1471‐5(b)(2) or
under Annex II of the applicable Model 1 IGA or Model 2 IGA.
12
This code should only be used when the withholding agent has received a certification on the FFI withholding statement of a participating FFI or
registered deemed‐compliant FFI that maintains the account that the FFI has reported the account held by the passive NFFE as a U.S. account (or
U.S. reportable account) under its FATCA requirements. The withholding agent must report the name and GIIN of such FFI in box 15d and 15e.
13
This code should only be used by a withholding agent that is reporting a payment (or portion of a payment) made to a QI with respect to the QI’s
recalcitrant account holders.

-20-

Instructions for Form 1042-S (2015)

of income you pay to the recipient or if
exemption code 15 is used (payee not
subject to chapter 4 withholding), the
chapter 4 status code of the recipient
must correctly reflect this exemption.
Note. If you use exemption code 04
(exempt under tax treaty), the country
code that you report in box 13e must be
a valid treaty country. Countries with
which the United States has a tax treaty
are listed at IRS.gov.
You, the withholding agent, are
liable for the tax if you know, or
CAUTION
should have known, that
underwithholding on a payment has
occurred.

!

Specific Instructions for
Withholding Agents

!

All amounts must be reported in
U.S. dollars.

CAUTION

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.

Amended Checkbox

See Amended Returns, later.

Pro-rata Basis Reporting
Checkbox

Withholding agents must check this box
to notify the IRS that an NQI that used
the alternative procedures of
Regulations section 1.1441-1(e)(3)(iv)
(D) failed to properly comply with those
procedures. See Pro-rata reporting,
earlier, for additional information.

Box 1, Income Code

All filers must enter the appropriate
2-digit income code from the list, earlier.
Use the income code that is the most
specific. See Pub. 515 for further
explanation of the income codes. Below
are examples on how to use some of
the income codes.
1. Use code 09 for the following
types of capital gain:

Instructions for Form 1042-S (2015)

a. Gains on disposal of timber, coal,
or domestic iron ore with a retained
economic interest, unless an election is
made to treat those gains as income
effectively connected with a U.S. trade
or business;
b. Gains on contingent payments
received from the sale or exchange after
October 4, 1966, of patents, copyrights,
secret processes and formulas,
goodwill, trademarks, trade brands,
franchises, and other like property;
c. Gains on certain transfers of all
substantial rights to, or an undivided
interest in, patents if the transfers were
made before October 5, 1966; and
d. Certain gains from the sale or
exchange of original issue discount
obligations issued after March 31, 1972.
2. Use code 17 for payments for
personal services performed by an
independent contractor as contrasted
with those performed by an employee.
This includes payments that are subject
to the business profits article of a treaty.
3. Use code 29 (deposit interest) if
you are paying bank deposit interest,
not code 01 (interest paid by U.S.
obligors-general).
4. Use code 24 (real estate
investment trust (REIT) distributions of
capital gains) for distributions of capital
gains from a real estate investment trust
(REIT). Use code 36 (capital gains
distributions) for capital gain
distributions (dividends) paid or credited
by mutual funds (or other regulated
investment companies). Include
short-term capital gain dividends (use
exemption code 02 (exempt under IRC
(other than portfolio interest)) in box 3a).
Note. Exempt-interest dividends
should be reported under income code
01 (interest paid by U.S.
obligors-general) (use exemption code
02 (exempt under IRC (other than
portfolio interest)) in box 3a).
5. Use code 28 for gambling
winnings. These are proceeds from a
game other than blackjack, baccarat,
craps, roulette, or big-6 wheel. For more
information, see Pub. 515.
6. Use code 33, 34, or 35 for all
substitute payment transactions. For
more information, see Regulations
sections 1.861-2(a)(7) and 1.861-3(a)
(6) and Notice 2010-46.
7. Use code 37 (return of capital) for
a nondividend distribution. This is a
distribution that is not paid out of the
earnings and profits of a corporation. It
represents a distribution in part or full
payment in exchange for stock.
-21-

8. Use code 40 (other dividend
equivalents under IRC section 871(m)
(formerly 871(l))) for other U.S.-source
dividend equivalents. These are
dividend equivalent payments under
section 871(m) that are not substitute
dividend payments identified with
income code 34.
9. Use code 41 (guarantee of
indebtedness) for certain guarantee of
indebtedness payments. These are
amounts paid for the provision of a
guarantee of indebtedness that was
issued after September 27, 2010.
10. Use either code 42 (earnings as
an artist or athlete – no central
withholding agreement) or 43 (earnings
as an artist or athlete – central
withholding agreement) for payments to
an artist or athlete. A central withholding
agreement is Form 13930, Application
for Central Withholding Agreement, plus
additional information specified in the
instructions to such form, that is entered
into by the artist or athlete, a designated
withholding agent, and the IRS. For
more details, see Pub. 515.
11. Use code 50 (income previously
reported under escrow procedure) with
respect to a recalcitrant account holder
of a dormant account for which a
participating FFI reported the income on
Form 1042-S in a prior calendar year
but for which the participating FFI was
not required to deposit the tax withheld
or determined that withholding was not
required until the current calendar year
under an applicable escrow procedure.
For additional information on the escrow
procedure for dormant accounts, see
Regulations section 1.1471-4(b)(6).
12. Use code 52 (dividends paid on
certain actively traded or publicly
offered securities), 53 (substitute
payments- dividends paid from certain
actively traded or publicly offered
securities), 51 (interest paid on certain
actively traded or publicly offered
securities), and 13 (royalties paid on
certain publicly offered securities) if the
income paid is described in Regulations
section 1.1441-6(c)(2) and you have
reduced the rate of withholding under an
income tax treaty without the recipient
providing a U.S. or foreign TIN.
If you paid more than one type of
income to or on behalf of the same
recipient, you must complete a separate
Form 1042-S, Copy A, for each income
type.
Note. Although income codes are
provided for short-term OID and
notional principal contract income,
those items are not always subject to

reporting on Form 1042-S. For example,
short-term OID may need to be reported
by an NQI or flow-through entity if those
amounts are paid to foreign persons
and another withholding agent backup
withheld on those amounts under the
presumption rules. Notional principal
contract income is reportable if it is
effectively connected with the conduct
of a trade or business in the United
States or results in the payment of
interest under Regulations section
1.446-3(g)(4) or a dividend equivalent
under section 871(m)) and the
regulations thereunder. For more
information, see the regulations under
chapter 3 and Pub. 515.

Box 2, Gross Income

For each income type, enter the gross
amount you paid to or on behalf of the
recipient during calendar year 2015,
including withheld tax. The following
special procedures apply to the
reporting of gross income.
You must report the entire amount of
a corporate distribution made with
respect to stock even if you elect to
reduce the amount of withholding on the
distribution because all or a part of the
distribution is nontaxable or represents
a capital gain dividend.
You must report the entire amount of
a payment if you do not know at the time
of payment the amount that is subject to
withholding because the determination
of the source of the income or the
calculation of the amount of income
subject to tax depends upon facts that
are not known at the time of payment.
If you applied the escrow procedure
under chapters 3 and 4, report the entire
amount of a payment that you
previously reported in a prior calendar
year for which you withheld tax but did
not deposit such tax under the escrow
procedure if the liability is due in the
current calendar year.
You must report the entire amount of
gains relating to the disposal of timber,
coal, or domestic iron ore with a
retained economic interest and gains
relating to contingent payments
received from the sale or exchange of
patents, copyrights, and similar
intangible property.
You must report only the amount of
cash paid on notional principal
contracts.

Boxes 3 and 4

If you are reporting amounts in boxes 7
through 9, check either box 3 or box 4 to
indicate whether the amounts were
withheld (or assumed by the withholding
agent) pursuant to chapter 3 (box 3) or

chapter 4 (box 4). If you are reporting
tax withheld under section 5000C,
check box 3 as if the tax were a
chapter 3 tax.
Note. Either box 3 or box 4 must be
checked on each Form 1042-S, not both
boxes. If you are not reporting amounts
in boxes 7 through 9 because you did
not withhold under chapter 3 or 4, you
should check box 3.
If you are reporting payments to U.S.
payees, check box 4 and leave boxes
3a and 3b blank.

Boxes 3a and 4a, Exemption
Code

In most cases, if the tax rate you
entered in box 3b or 4b is 00.00, you
should enter the appropriate exemption
code (01 through 22) from Income
Codes, Exemption Codes, and
Recipient, Withholding Agent, or
Intermediary Codes, earlier, as
applicable for chapter 3 and 4 purposes.
In certain cases more than one
exemption code will apply; see below
instructions for the applicable codes to
determine which code to use.
If an amount was withheld under
chapter 4 (the tax rate you entered in
box 4b is greater than zero and is not
due to backup withholding), enter “00” in
box 4a. If an amount was withheld under
chapter 3 (the tax rate you entered in
box 3b is greater than zero and is not
due to backup withholding), enter “00” in
box 3a. If the tax rate you entered in
box 3b is due to backup withholding,
leave box 3a blank.
If exemption code 01 or 14
(effectively connected income) applies,
you must enter the recipient's U.S. TIN
in box 13a if you relied on a
presumption rule to treat the income as
effectively connected with a U.S. trade
or business. If the recipient's U.S. TIN is
unknown or unavailable, you must
withhold tax at the rate of 30% (30.00)
and enter “00” in box 4b or 3b (as
applicable).
A withholding agent should use
exemption code 06 (QI that assumes
primary withholding responsibility) only
if it is making a payment to a QI that has
represented on its Form W-8IMY that it
is assuming primary withholding
responsibility under chapters 3 and 4.
A withholding agent should use
exemption code 07 (WP or WT) only if it
is making a payment to a foreign
partnership or trust that has represented
on its Form W-8IMY that it is a
withholding foreign partnership or trust.
-22-

A withholding agent should use
exemption code 08 (U.S. branch treated
as U.S. person) or 09 (territory FI
treated as U.S. person) (as applicable)
only if it is making a payment to a U.S.
branch or to a territory FI and it has
represented on its Form W-8IMY that it
agrees to be treated as a U.S. person.
A withholding agent should use
exemption code 10 (QI represents that
income is exempt) only if it makes a
payment to a QI that has not assumed
primary withholding responsibility under
chapters 3 and 4 or primary backup
withholding responsibility, but has
represented on a withholding statement
associated with its Form W-8IMY that
the income is exempt from withholding.
A withholding agent should use
exemption code 11 (QSL that assumes
primary withholding responsibility) only
if the withholding agent makes a
substitute dividend payment to a
financial institution (including a QI) that
represented on its Form W-8IMY that is
acting as a QSL for the account
associated with the form.
A withholding agent should use
exemption code 12 (payee subjected to
chapter 4 withholding) if the recipient
has been withheld upon under chapter 4
and thus chapter 3 withholding does not
apply. See Special Instructions for use
of Chapter 3 Exemption Codes, later.
A withholding agent should use
exemption code 13 (grandfathered
payment) only if the withholding agent
makes a payment under a
grandfathered obligation and exemption
code 13 is the only exemption code that
applies. If another exemption code
applies, it should be used instead of
exemption code 13.
A withholding agent should use
exemption code 15 (payee not subject
to chapter 4 withholding) if the payment
is a withholdable payment (as defined in
Regulations section 1.1471-3(a)), but
has not been withheld upon under
chapter 4 because of the payee's
chapter 4 status. Also, if the withholding
agent applies the 90-day grace period
for a withholdable payment following a
change in circumstances, use
exemption code 15 (payee not subject
to chapter 4 withholding).
A withholding agent should use
exemption code 16 (excluded
nonfinancial payment) only if exemption
code 16 is the only exemption code that
applies. If another exemption code
applies, it should be used instead of
exemption code 16.
Instructions for Form 1042-S (2015)

A withholding agent should use
exemption code 17 (foreign entity that
assumes primary withholding
responsibility) only if it makes a
payment to a QI that assumes primary
withholding responsibility, a WP, or a
WT.
A withholding agent should use
exemption code 18 (U.S. payees – of
participating FFI or registered
deemed-compliant FFI) only if it makes
a payment to a participating FFI or
registered deemed-compliant FFI and
only to the extent represented on such
FFI's withholding statement associated
with its Form W-8IMY that the payment
is allocable to a chapter 4 withholding
rate pool of U.S. payees and FFI
certifies on its withholding certificate
that the FFI meets the requirements to
include the account holder in a
withholding rate pool of U.S. payees.
A withholding agent should use
exemption code 20 (dormant account)
only if it makes a withholdable payment
to a participating FFI or registered
deemed-compliant FFI that represented
on its withholding statement associated
with its Form W-8IMY that the payment
is allocable to a dormant account holder
for which the escrow procedure of
Regulations section 1.1471-4(b)(6)
applies.
A withholding agent should use
exemption code 21 (excluded payment
on offshore obligation) for a payment
that is excluded from the definition of a
withholdable payment under
Regulations section 1.1473-1(a)(4)(vi).
A withholding agent should also use
exemption code 21 for any sale or
distribution that is an amount subject
withholding under chapter 3 but is not a
witholdable payment under Regulations
section 1.1473-1(a)(1)(ii). If another
exemption code applies, it should be
used instead of exemption code 21. The
exemption for these types of payments
will end for payments made after
December 31, 2016.
A withholding agent should use
exemption code 22 (excluded payments
on collateral) for a payment made with
respect to a collateral arrangement that
is excluded from the definition of a
withholdable payment under
Regulations section 1.1473-1(a)(4)(vii).
If another exemption code applies, it
should be used instead of exemption
code 22. The exemption for these types
of payments will end for payments made
after December 31, 2016.
If you have failed to provide another
withholding agent with appropriate
information regarding the status of the
Instructions for Form 1042-S (2015)

person to whom you are making a
payment, the other withholding agent
may be required to withhold on the
payment based on the presumption
rules. If the income is in fact exempt
from withholding or subject to a reduced
rate of withholding, and the account
holder requests a corrected form, you
must submit a Form 1042-S providing
the correct information. In this situation,
you must:
Indicate the correct rate of
withholding that should have been
applied to the income in boxes 3b or 4b,
Enter the appropriate exemption
codes, if any, in boxes 3a and 4a,
Enter the actual amount of U.S.
federal tax withheld by the other
withholding agent in box 8,
Provide the name and address of the
actual recipient in boxes 13a-g along
with the other required information for
the recipient.
Provide the name and EIN of the
other withholding agent that actually
withheld and deposited the tax (primary
withholding agent) in boxes 14a and b.

!

CAUTION

If you must submit Form
1042-S, you must also submit
Form 1042.

Special instructions for use of Chapter 3 Exemption Codes. If an amount
was withheld under chapter 4, you may
also include a chapter 3 exemption
code and tax rate in boxes 3a and 3b to
show the rate that would otherwise
apply if the payment was exempt from
withholding under chapter 4. This may
be done, for example, to assist the
beneficial owner in pursuing a claim for
refund. In such a case, do not check
box 3 (only box 4 should be checked) to
show that withholding was applied
under chapter 4.

Boxes 3b and 4b, Tax Rate

Enter the correct rate of withholding that
applies to the income in box 2 (gross
income) or box 6 (net income), as
appropriate. In the case of a payment
subject to chapter 4 withholding, the
correct rate of withholding is “30.00.”
For purposes of chapter 3 withholding,
see Valid Tax Rate Table, later. The
correct tax rate should be included even
if you withheld at a different rate. For
example, if an NQI that is a participating
FFI is reporting dividends paid to a
beneficial owner who is exempt from
withholding under chapter 4 and a
resident of a country with which the
United States does not have a tax treaty
and a U.S. withholding agent paid the
dividend and incorrectly withheld only
15% under chapter 3 (rather than the
-23-

required 30%) and the NQI withholds an
additional 15% under chapter 3, the NQI
should report “30.00” in box 3b. See
Example 2. in Multiple Withholding
Agent Rule, earlier. The tax rate on
dividends paid to a corporation created
or organized in, or under the law of, the
Commonwealth of Puerto Rico may be
10%, rather than 30%. See Pub. 515 for
more information.
In the case of a specified Federal
procurement payment subject to section
5000C, withholding, the correct rate of
withholding is 2% or “02.00.” For Form
1042-S purposes, report tax withheld
under section 5000C in box 3b as if the
tax were a chapter 3 tax.
Enter the tax rate using the following
format: two digits, a decimal, and two
digits (for example,“30.00” for 30%).
However, if the income is exempt from
tax under a U.S. tax treaty or the Code,
enter “00.00.” If the tax rate is less than
10%, enter a zero before the tax rate
(for example, “04.00” for 4%).
If you withheld at more than
one tax rate for a specific type
CAUTION
of income that you paid to the
same recipient, you must file a separate
Form 1042-S, Copy A, for each amount
to which a separate rate was applied.

!

Valid Tax Rate Table
00.00

08.00

20.00

02.00

10.00

25.00

04.00

12.00

27.50

04.90

12.50

28.00

04.95

14.00

30.00

05.00

15.00

35.00

07.00

17.50

39.60

Exception for central withholding
agreements. If you are the designated
withholding agent who has entered into
a central withholding agreement and
you report an amount in box 2 using
income code 43 (earnings as an artist or
athlete-central withholding agreement),
you do not have to enter a tax rate in
box 3b but you must include a chapter 4
exemption code 16 (excluded
nonfinancial payments) in box 4a.

Box 5, Withholding
Allowance

This box should be completed only if the
income code reported in box 1 is 16
(scholarship or fellowship grants), 17
(compensation for independent
personal services), 18 (compensation
for dependent personal services), 19

(compensation for teaching), 20
(compensation during studying and
training), or 42 (earnings as an artist or
athlete-no central withholding
agreement). See Pub. 515 for more
information.

Box 6, Net Income

Complete this box only if you entered an
amount in box 5. Otherwise, leave it
blank.

Boxes 7 Through 10,
Federal Tax Withheld
Box 7. Enter the total amount of U.S.
federal tax you actually withheld in box 7
under chapter 3 or 4. If you did not
withhold any tax, enter “-0-.” If you are a
participating FFI or registered
deemed-compliant FFI that, for
chapter 4 purposes, applied the escrow
procedure for dormant accounts, if the
payment is also an amount subject to
chapter 3 withholding and tax is
withheld and deposited under chapter 3,
do not check the box “Check if tax not
deposited with IRS pursuant to escrow
procedure.” Instead check box 3 and
complete box 3b to report the tax
withheld under chapter 3.
A withholding agent that withheld tax
during calendar year 2015 and that was
not required to deposit with the IRS the
tax withheld during calendar year 2015
pursuant to the escrow procedure under
Regulations sections 1.1471-2(a)(5)(ii)
and/or 1.1441-3(d) must check the box
“Check if tax not deposited with IRS
pursuant to escrow procedure.” A
withholding agent reporting payments
pursuant to the escrow procedure must
report such payments on separate
Forms 1042-S.

!

CAUTION

Box 7 must be completed in all
cases, even if no tax has been
deposited.

Box 8. If you are a withholding agent
filing a Form 1042-S to report income
that has already been subject to
withholding by another withholding
agent, enter the amount actually
withheld by the other agent(s) in box 8.
Further, report in box 8 any credit
forward of prior withholding as
determined under Notice 2010-46 with
respect to substitute dividend
payments.
Box 9. Enter the total amount of tax
paid by you and not withheld from the
payment to the recipient.
Box 10. Enter in box 10 the total
amount of tax withheld by you (box 7)
and any other withholding agent (box 8),

but do not include the amount reported
in box 9.

Definitions, earlier, for more
information.)

Box 11, Amount Repaid to
Recipient

Boxes 12b and 12c,
Withholding Agent's
Chapter 3 and Chapter 4
Status Code

This box should be completed only if:
You repaid a recipient during the
2016 calendar year under the
reimbursement procedure (see
instructions to Form 1042) an amount of
tax that was overwithheld under
chapter 3 or 4; and
You are going to reimburse yourself
by reducing, by the amount of tax
actually repaid to the recipient, the
amount of any deposit made for a
payment period in calendar year 2016.
If you applied the reimbursement or
set-off procedure during the 2015
calendar year, do not complete box 11.
Instead, reduce the amount of
withholding reported in box 7.
In most cases, an intermediary or
flow-through entity should not enter an
amount in box 11 unless it is a QI that
represented on its Form W-8IMY that it
is assuming primary withholding
responsibility or is a WP or WT.
In order to claim a credit for amounts
overwithheld, you must timely file a
Form 1042 to claim a credit for tax
overwithheld and attach a statement
that the filing of the Form 1042
constitutes a claim for refund.
The adjustment for amounts
overwithheld does not apply to
CAUTION
partnerships or nominees
required to withhold under section 1446.

!

Box 12a, Withholding
Agent's Employer
Identification Number
(EIN)

In most cases, you are required to enter
your EIN. However, if you are filing Form
1042-S as a QI, WP, or WT, enter your
QI-EIN, WP-EIN, or WT-EIN.
If you do not have an EIN, you can
apply for one online at
www.irs.gov/businesses/small or by
telephone at 1-800-829-4933. Also, you
can apply for an EIN by filing Form
SS-4, Application for Employer
Identification Number. 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. (See the definitions for
Qualified intermediary (QI), and
Withholding foreign partnership (WP) or
withholding foreign trust (WT) in
-24-

Enter the withholding agent status
code(s) from the list of Recipient Codes,
earlier. A chapter 4 status code is
required only if the income reported in
box 2 is a withholdable payment. A
chapter 3 status code is not required if
the income reported in box 2 is not an
amount subject to chapter 3
withholding.
If you are a transfer agent or paying
agent acting as a withholding agent on
behalf of a payer (and therefore
completing boxes 18-20), you must use
the chapter 3 and 4 status codes
applicable to the status of the payer.

Boxes 12d-12i,
Withholding Agent's
Name, GIIN, Country Code,
Foreign TIN (if any), and
Address
Enter your name and address in the
appropriate boxes. 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.
If you are a nominee that is the
withholding agent under section 1446,
enter the PTP's name and other
information in boxes 15a through 15i.
Also, enter your chapter 3 and
chapter 4 status codes to the extent
applicable from Exemption Codes and
Recipient Codes, earlier.
Note. On statements furnished to
individual recipients of U.S. source
deposit interest, in addition to your
name and address, you must include
the telephone number of a person to
contact. This number must provide
direct access to an individual who can
answer questions about the statement.
The telephone number is not required
on Copy A of paper forms or on
electronically filed forms.
Box 12e, Withholding Agent's GIIN.
The GIIN provided, if any, should be the
GIIN issued to the branch of, or
disregarded entity owned by, the
participating FFI or registered
deemed-compliant FFI that is making
the payment.

Instructions for Form 1042-S (2015)

Boxes 13a and 13h,
Recipient's U.S. Taxpayer
Identification Number
(TIN) and GIIN

You must obtain and enter a U.S.
taxpayer identification number (TIN) for
any of the following recipients.
Any recipient whose income is
effectively connected with the conduct
of a trade or business in the United
States.
Note. For these recipients, enter
exemption code 01 in box 3a or
exemption code 14 in box 4a.
Any foreign person claiming a
reduced rate of, or exemption from, tax
under a tax treaty between a foreign
country and the United States, unless
the recipient provides a foreign TIN (in
such case, use box 13i), or unless the
income is an unexpected payment (as
described in Regulations section
1.1441-6(g)) or consists of dividends
and interest from stocks and debt
obligations that are actively traded;
dividends from any redeemable security
issued by an investment company
registered under the Investment
Company Act of 1940 (mutual fund);
dividends, interest, or royalties from
units of beneficial interest in a unit
investment trust that are (or were, upon
issuance) publicly offered and are
registered with the Securities and
Exchange Commission under the
Securities Act of 1933; and amounts
paid with respect to loans of any of the
above securities. In the latter case, you
must use income code 13, 51, 52, or 53.
Any nonresident alien individual
claiming exemption from tax under
section 871(f) for certain annuities
received under qualified plans.
A foreign organization claiming an
exemption from tax solely because of its
status as a tax-exempt organization
under section 501(c) or as a private
foundation.
Any QI.
Any WP or WT.
Any nonresident alien individual
claiming exemption from withholding on
compensation for independent personal
services.
Any U.S. branch of an FFI or territory
FI that is treated as a U.S. person.
Any QSL that was paid a substitute
dividend.
In all other cases, if you know the
recipient's TIN or if a foreign person
provides a TIN on Form W-8, but is not
required to do so, you must include the
TIN on Form 1042-S.
Instructions for Form 1042-S (2015)

You must include a GIIN if you are
required to collect a GIIN for the
recipient under the requirements
documenting the payee under
chapter 4. If you make a payment to a
disregarded entity or branch that is
identified in Part II of Form W-8BEN-E,
then report the GIIN of the disregarded
entity or branch provided in that section.

Boxes 13b-g, Recipient's
Status Code, Name,
Country Code, and
Address
Boxes 13b and 13c, Recipient Status
Code. Enter the recipient status code
from the list of Recipient Status Codes,
earlier. The following special
instructions apply for chapter 3 status
codes.
If applicable, use recipient code 22
(artist or athlete) instead of recipient
code 16 (individual), 15 (corporation), or
08 (partnership other than withholding
foreign partnership).
If you are making a payment to an
NQI or flow-through entity, in most
cases you must use the recipient code
that applies to the type of recipient who
receives the income from the NQI or
flow-through entity.
Use recipient code 08 (partnership
other than withholding foreign
partnership) only if you are reporting a
payment of income that is effectively
connected with the conduct of a trade or
business of a nonwithholding foreign
partnership in the United States.
Otherwise, follow the rules that apply to
payments to flow-through entities.
Use recipient code 21 (unknown
recipient) only if you have not received a
withholding certificate or other
documentation for a recipient or you
cannot determine how much of a
payment is reliably associated with a
specific recipient. Do not use this code
because you cannot determine the
recipient's status as an individual,
corporation, etc. The regulations under
chapter 3 provide rules on how to
determine a recipient's status when a
withholding agent does not have the
necessary information.
Use recipient code 13 (qualified
securities lender – qualified
intermediary) or 14 (qualified securities
lender – other) if you make a payment to
a QSL.
Only QIs may use recipient codes 29
(PAI withholding rate pool – general)
and 30 (PAI withholding rate pool –
exempt organizations). Only QIs, WPs,
and WTs that made a pooled reporting
election for chapter 3 purposes may use
-25-

recipient codes 31 (agency withholding
rate pool – general), 32 (agency
withholding rate pool – exempt
organization), 33 (joint account
withholding rate pool), 27 (withholding
rate pool – general), and 28 (withholding
rate pool – exempt organization) for
chapter 3 purposes. Recipient code 28
or 30 should be used only for pooled
account holders that have claimed an
exemption based on their tax-exempt
status and not some other exemption
(for example, treaty or other Code
exception). Do not include a chapter 4
status code for the recipient if you are
using a chapter 3 pooled reporting code
as the recipient’s chapter 3 status code.
A U.S. withholding agent making a
payment to a QI should use recipient
code 12 and recipient code 09 or 11 if it
is making a payment to a WP or WT,
respectively.
A chapter 4 status code is required
only if the payment is a withholdable
payment or when a participating FFI or
registered deemed-compliant FFI
provides a chapter 4 withholding rate
pool of U.S. payees. The chapter 4
status code may be determined under
the applicable intergovernmental
agreement (IGA) by a withholding agent
that is an FFI subject to such an
agreement. The following special
instructions apply for chapter 4 status
codes.
Only use recipient code 15
(nonparticipating FFI) or 30 (recalcitrant
account holder) if you are reporting
directly to the recipient. See Amounts
paid to a nonqualified intermediary or
flow-through entity earlier. If you are
reporting the chapter 4 reporting pools
of recalcitrant account holders of a
participating FFI, registered
deemed-compliant FFI or QI, use codes
42 through 49. Only use chapter 4
reporting pool code 48 (U.S. payees
pool) if a participating FFI or registered
deemed-compliant FFI has provided a
Form W-8IMY certifying that it meets the
requirements to include the account
holder in a withholding rate pool of U.S.
payees and that is associated with a
withholding statement allocating the
payment or a portion of the payment to
a chapter 4 withholding rate pool of U.S.
payees. Only use chapter 4 reporting
pool code 49 (QI-Recalcitrant
Pool-General) if you are reporting
recalcitrant account holders of a QI.
Use recipient code 26 (excepted
NFFE – other) if you are reporting to an
NFFE treated as a U.S. person.
Only use recipient code 29 (unknown
recipient) if you have received a
withholding certificate or other

documentation with respect to a
withholdable payment from an
intermediary or flow-through entity. Only
use this code if you also used recipient
code 21 (unknown recipient) as the
chapter 3 status code. If you have
received a withholding certificate or
other documentation from an
intermediary or flow-through entity, you
must include the entity’s information in
boxes 15a through 15i.
Use recipient code 37
(undocumented preexisting obligation)
for an obligation that a withholding
agent has not documented and the
payment being reported was made
before the expiration of time period
allowed for documenting the obligation
and thus the withholding agent was not
required to apply the presumption rules
to determine the payee's chapter 4
status.
Use recipient code 39 (account
holder of excluded financial account) if
you are reporting amounts paid with
respect to an obligation that is excluded
from the definition of financial account
for chapter 4 purposes (see Regulations
section 1.1471-5(b)(2)).
Use recipient code 41 (NFFE subject
to 1472 withholding) if you are reporting
amounts paid to a specific recipient that
is an NFFE that you (or another
withholding agent) withheld upon under
section 1472 (i.e., you are reporting
amounts in boxes 7 through 9) unless
the NFFE is treated as a recalcitrant
account holder under Regulations
section 1.1471-5(g), in which case, use
code 30 (recalcitrant account holder).
Use recipient code 47
(nonparticipating FFI pool) if you
received a withholding certificate or
other documentation with respect to a
withholdable payment from an
intermediary or flow-through entity that
is a participating FFI or
deemed-compliant FFI (other than a
WP, WT, or QI that assumes primary
withholding responsibility) and cannot
reliably associate the payment with
documentation to determine the payee's
chapter 4 status. You must also report
the recipient as “Unknown Recipient”
and include the entity's information in
boxes 15a through 15i.
If you are a QI, WP, or WT reporting
direct account holders, do not include a
chapter 3 status code for the recipient if
you are using a chapter 4 reporting pool
code as the recipient’s chapter 4 status
code.
Box 13d, Recipient's Name. Enter the
complete name of the recipient in
box 13d.

If you do not know the name of the
recipient, enter “Unknown Recipient.”
If Form 1042-S is being completed by
a QI, WP, or WT for a chapter 3
withholding rate pool, or chapter 4
withholding pool, enter “Withholding
rate pool” if withholding under chapter 3
was applied or if chapter 4 withholding
was applied, a description of the
chapter 4 reporting pool (for example
“Nonparticipating FFI Pool ”) in box 13d.
A withholding agent reporting
payments made to a participating FFI or
registered deemed-compliant FFI with
respect to a chapter 4 reporting pool
must include the name and address of
the FFI in boxes 13d through 13g as
well as the FFI's GIIN and country code.
The GIIN reported must be the GIIN of
the branch to whom the withholding
agent is making the payment.
A QI reporting payments made to a
PAI on a withholding rate pool basis
must include the name and address of
the PAI in boxes 13d through 13g.
Box 13e, Recipient's Country Code.
You must enter the code (from the list at
IRS.gov) for the country of which the
recipient claims residency under that
country's tax laws. Enter “OC” (other
country) only when the country of
residence does not appear on the list or
the payment is made to an international
organization (for example, the United
Nations). Enter “UC” (unknown country)
only if the payment is to an unknown
recipient. If you are making a payment
to a QI, QSL, WP, or WT, or if you are a
QI, QSL, WP, or WT and are making a
payment to a QI, WP, or WT withholding
rate pool, enter the country code of the
QI, WP, or WT. Also, if you are making a
payment to a participating FFI or
registered deemed-compliant FFI's
chapter 4 reporting pool, enter the
country code of the participating FFI or
registered deemed-compliant FFI or
branch of or disregarded entity owned
by such FFI receiving the withholdable
payment and that was listed on Part II of
either the Form W-8BEN-E or W-8IMY.
If exemption code 04 (exempt
under tax treaty) appears in
CAUTION
box 3a or if a reduced rate of
withholding based on a tax treaty is
entered in box 3b, the country code
entered in box 13e must be a country
with which the United States has
entered into an income tax treaty.

!

Boxes 13f and 13g, address. In most
cases, you must enter a foreign address
in boxes 13f and 13g. However, there
are limited exceptions. For example,
you may enter a U.S. address when
-26-

reporting payments of scholarship or
fellowship grants (income code 16).
For addresses outside the United
States or its commonwealths and
possessions, follow the foreign
country's practice for entering the postal
code.
For addresses within the United
States, use the U.S. Postal Service
2-letter abbreviation for the state name.
Do not enter “United States” or “U.S.”
If you want to enter the recipient's
account number, use box 16.

Box 13i, Recipient's
Foreign Tax Identifying
Number

You must obtain and enter a foreign
taxpayer identifying number for any of
the following recipients:
Any foreign person claiming a
reduced rate of, or exemption from, tax
under a tax treaty between a foreign
country and the United States if such
person did not provide a U.S. TIN and
the income is not the type for which an
exemption from the TIN requirement
applies (as described earlier).
Any recipient of a payment made with
respect to an obligation maintained at a
U.S. office or branch of the withholding
agent if withholding agent is a financial
institution and the foreign taxpayer
identifying number is available in the
withholding agent's electronically
searchable information or is required to
be collected by the withholding agent on
Form W-8.
Use box 13i to enter the recipient's
identifying number used in the
recipient's country of residence for tax
purposes. Box 13i is optional except as
described above.
Note. Starting in calendar year 2017,
with respect to an obligation that a
withholding agent that is a financial
institution maintains at its U.S. office or
branch, a withholding agent will be
required to report either the recipient's
foreign tax identification number or the
recipient's date of birth. The recipient's
foreign tax identification number will be
required in box 13i if the recipient is
resident in a country identified in the
instructions for “Requester of Forms
W-8BEN, W-8ECI, W-8EXP, and
W-8IMY” as required to provide a
foreign taxpayer identification number.
In all other cases, the recipient's date of
birth will be required in box 17.

Instructions for Form 1042-S (2015)

Boxes 14a and 14b,
Primary Withholding
Agent's Name and EIN

If you reported amounts withheld by
another withholding agent (the primary
withholding agent), you must provide
the name and EIN of the withholding
agent that withheld the tax reported in
box 8. If multiple withholding agents
withheld amounts reported on the same
Form 1042-S, report the name of any
one of the withholding agents that
withheld amounts. This information was
optional for 2014 but is required for
2015 and subsequent years.

Boxes 15a Through 15i,
Intermediary/
Flow-Through Entity's
Name, Status Code,
Country Code, Address,
EIN, GIIN, and Foreign
Taxpayer Identification
Number

If you are reporting amounts paid to a
recipient whose withholding certificates
or other documentation has been
submitted to you with a Form W-8IMY
provided by an intermediary or
flow-through entity, you must include the
name and address of the intermediary
or flow-through entity with whose Form
W-8IMY the recipient's Form W-8 or
other documentation is associated.
You must also include the
intermediary or flow-through entity's
chapter 3 and chapter 4 status codes
and, if any, the TIN and GIIN of the
intermediary or flow-through entity when
provided or required to be collected by
the withholding agent. If the
intermediary or flow-through completed
Part II of Form W-8IMY, then report the
GIIN provided in that section.
Note. An intermediary or flow-through
entity will leave these boxes blank
unless it is making the payment to an
intermediary or flow-through entity.
Box 15f, Country Code. You must
enter the country code (from the list at
IRS.gov) for the country where the
intermediary or flow-through entity is
located.
Box 15g, Intermediary or
Flow-Through Entity's Foreign Taxpayer Identification Number. Use
box 15g to enter the intermediary or
flow-through entity's identifying number
used in the country of residence for tax
purposes. Box 15g is optional.

Instructions for Form 1042-S (2015)

If you are a nominee that is the
withholding agent under section 1446,
enter the PTP's name and other
information in these boxes.

You may be required to submit
amended Forms 1042-S
CAUTION
electronically. See Electronic
Reporting, earlier, and Pub. 1187.

Box 16, Recipient’s
Account Number

If any information you correct on
Form(s) 1042-S changes the
information you previously reported on
Form 1042, you also must correct the
Form 1042 by filing an amended return.
To do this, see the Form 1042
instructions.

If you are a financial institution reporting
amounts paid to your direct account
holder with respect to an account
maintained by you at your U.S. office or
branch, you must report the recipient’s
account number in box 16. If the amount
is paid through a nonqualified
intermediary or flow-through entity, you
are not required to use this box.

Box 17, Recipient’s Date of
Birth

Use box 17 to enter the recipient’s date
of birth if it is available in the withholding
agent's electronically searchable
information. Box 17 is optional.
Note. Starting in calendar year 2017,
the withholding agent will be required to
report either the recipient's foreign tax
identification number or the recipient's
date of birth.

Boxes 18 Through 20,
Payer's Name, Payer's TIN,
and Payer's GIIN
See the definition of Payer in
Definitions, earlier. Include the payer's
name, TIN, and GIIN if different from the
withholding agent shown in boxes 12a,
d, and e.
If payment is being made by a
transfer agent or a paying agent acting
as a withholding agent on behalf of a
payer, use the chapter 3 and 4 status
codes applicable to the status of the
payer when completing boxes 12b and
12c above.

Boxes 21 Through 23,
State Income Tax Withheld
and Related Information

Include in these boxes information
relating to any state income tax
withheld.

Amended Returns

If you filed a Form 1042-S with the IRS
and later discover you made an error on
it, you must correct it as soon as
possible. To correct a previously filed
Form 1042-S, you will need to file an
amended Form 1042-S.

-27-

!

If you are filing electronically, see
Amended Returns in Pub. 1187.
If you are not filing electronically,
follow these steps to amend a
previously filed Form 1042-S.
Step 1. Prepare a paper Form 1042-S.
Enter all the correct information on
the form, including the recipient name
and address, money amounts, and
codes.
Enter an “X” in the amended box at
the top of the form.
Amended checkbox. Enter an “X” in
the amended checkbox of Copy A only
if you are amending a Form 1042-S you
previously filed with the IRS. Enter an
“X” in the amended checkbox on the
copy you give to the recipient only if you
are correcting a Form 1042-S previously
furnished to the recipient. You must
provide statements to recipients
showing the corrections as soon as
possible.
Step 2. File the amended paper Form
1042-S with a Form 1042-T. See the
Form 1042-T instructions for information
on filing these forms.

!

CAUTION

earlier.

If you fail to correct Form(s)
1042-S, you may be subject to
a penalty. See Penalties,

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, 1442,1446 (for
PTPs), 1471, and 1472 require
withholding agents to report and pay
over to the IRS taxes withheld from
certain U.S. source income. Form
1042-S is used to report the amount of
income and withholding to the payee.
Form 1042 is used to report the amount
of withholding that must be paid over to
the IRS. Section 6109 requires you to
provide your identification number.
Routine uses of this information include
giving it to the Department of Justice for
civil and criminal litigation, and cities,
states, the District of Columbia, and
U.S. Commonwealths and possessions

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
this form will vary depending on
individual circumstances. The estimated
average time is 34 minutes.

suggestions for making this form
simpler, we would be happy to hear
from you. You can send us comments
from www.irs.gov/formspubs. Click on
“More Information” and then on “Give us
feedback.” Or you can write to Internal
Revenue Service, Tax Forms and
Publications, 1111 Constitution Ave.
NW, IR-6526, Washington, DC 20224.
Do not send the form to this address.
Instead, see Where, When, and How To
File, earlier.

If you have comments concerning the
accuracy of these time estimates or

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Instructions for Form 1042-S (2015)