1042-S Instructions for Form 1042-S

2020

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
IRS.gov/Form1042S.

General Instructions
What's New
Reliance on proposed regulations
reducing burden under FATCA and
Chapter 3. On December 18, 2018, the
Internal Revenue Service and
Department of Treasury issued
proposed regulations (83 FR 64757) to
reduce taxpayer burden with respect to
certain requirements under Chapters 3
and 4 of the Code. For 2020, a
withholding agent may rely on the
following provisions in connection with
completing Form 1042-S.
• Withholding and reporting in a
subsequent year. A partnership or
trust that is permitted to withhold in a
subsequent year with respect to a
foreign partner's or beneficiary's share
of income for the prior year may
designate the deposit of the withholding
as attributable to the preceding year and
in some cases a partnership is provided
an extended due date for filing and
furnishing Form 1042-S. See the
instructions for Box 7c, later.
• Adjustments to overwithholding
under the reimbursement and set-off
procedures. A withholding agent may
make adjustments to overwithholding
using either the reimbursement or
set-off procedures until the extended
due date for filing Form 1042-S (unless
the Form 1042-S has already been filed
or furnished). Additionally, a withholding
agent may use the extended due date
for filing a Form 1042 to claim a credit
for any adjustments made to
overwithholding. See the instructions for
Box 9, later.
Boxes 3b and 4b (tax rates). The
revised backup withholding rate under
section 3406 (24%) has been added to
the Valid Tax Rate Table, later.

Mar 09, 2020

Boxes 12b, 12c, 13f, 13g, 15b, 15c,
16d, and 16e (Chapter 3 Status
Code). Chapter 3 Status Codes 01
(U.S. Withholding Agent - FI), 02 (U.S.
Withholding Agent - Other), and 34
(U.S. Withholding Agent - Foreign
branch of FI) have been deleted, and
Chapter 3 Status Codes 36 (Foreign
Government - Integral Part) and 37
(Foreign Government - Controlled
Entity) have been added. Chapter 3
Status Code 19 has been updated from
“Government or International
Organization” to “International
Organization.”
Box 12f (country code). If the
withholding agent is a U.S. person or a
foreign branch of a U.S. person, filers
are now permitted to enter “US” in
box 12f (even though “US” is not a code
on the list at IRS.gov/CountryCodes).

Reminders
Withholding rates. The rate of
withholding under section 1446 by a
publicly traded partnership on a
distribution of income effectively
connected to a U.S. trade or business is
21% for corporate partners and 37% for
all other partners.
The rate of withholding by a Qualified
Investment Entity on a distribution 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 21%.
Qualified derivatives dealers
(QDDs). These instructions provide
guidance on how to report payments on
Form 1042-S that are made to and by
QDDs. See Payments by U.S.
Withholding Agents and Amounts Paid
by Qualified Intermediaries, later. For
more information on the withholding and
reporting requirements associated with
payments made to and by QDDs, see
Rev. Proc. 2017-15. See also Notice
2020-2 (2020-3 I.R.B. 327), which
extends the phase-in period provided in
Notice 2018-72, 2018-40 I.R.B. 522, for
certain provisions of the section 871(m)
regulations for two years, including for
certain requirements of a qualified
derivatives dealer (QDD).

Cat. No. 64278A

Foreign Account Tax Compliance
Act (FATCA). Form 1042-S reports
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. For
payments to 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 the
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).
Interest on deposits. 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
paid to certain nonresident aliens in the
bullet list under Amounts Subject to
Reporting on Form 1042-S, later.
Substitute forms. A substitute form
furnished to a recipient must conform in
format and size to the official IRS form
and contain the exact same information
as the copy filed with the IRS. However,
the size of the form may be adjusted if
the substitute form is presented on a
landscape oriented page instead of
portrait. Only one Form 1042-S may be
submitted per page, regardless of
orientation. Withholding agents that
furnish a substitute Form 1042-S (Copy
B, C, or D) to the recipient must furnish
a separate substitute Form 1042-S for
each type of payment of income (as
determined by the income code in Box
1). Withholding agents are no longer

permitted to combine all payments of
income on a single substitute Form
1042-S. For more information, see
Substitute Forms, later.
Account-by-account reporting by
U.S. financial institutions. A U.S.
financial institution or a U.S. branch of a
foreign financial institution maintaining
an account within the United States is
required to report payments of the same
type of income (as determined by the
income code in Box 1) made to multiple
financial accounts held by the same
beneficial owner on separate Forms
1042-S for each account. See
Account-by-Account Reporting by
Certain Financial Institutions, later.
Withholding agent's status codes.
Withholding agents must enter both a
chapter 3 and a chapter 4 status code
regardless of the type of payment being
made. See Boxes 12b and 12c,
Withholding Agent's Chapter 3 and
Chapter 4 Status Code, later.
Recipient country code. If the
recipient is unknown, leave Box 13b,
Recipient's country code, blank and
enter “Unknown Recipient” in Box 13a,
Recipient's name.
Treaty claims and limitation on benefits articles. Withholding agents that
are withholding at a reduced rate based
on a treaty claim by an entity must
include a limitation on benefits code
(LOB code) in Box 13j for the recipient
when they receive documentation
establishing the applicable limitation on
benefits provision of the treaty under
which the entity qualifies. Withholding
agents are not, however, required to
obtain new documentation unless they
are otherwise required to renew such
documentation. See Box 13j, LOB
Code, later.
Chapter indicator. Withholding agents
must enter either “3” or “4” in Box 3 to
indicate the chapter with respect to
which a Form 1042-S is being filed. See
Chapter indicator under Box 3, later, for
more information.
Filing Information Returns Electronically (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. See Pub. 1187, Specifications
for Electronic Filing of Form 1042-S,
Foreign Person’s U.S. Source Income
Subject to Withholding.
Unique form identifier. Withholding
agents must assign a unique identifying

number to each Form 1042-S they file.
This identifying number is used, for
example, to identify which information
return is being corrected or amended
when multiple information returns are
filed by a withholding agent with respect
to the same recipient. The unique
identifying number cannot be the
recipient's U.S. or foreign TIN. The
unique identifying number must be
numeric. The length of a given
identifying number must be exactly 10
digits. The identifying number must be
unique to each original Form 1042-S
filed for the current year. The identifying
number can be used on a new original
form in a subsequent year.

Purpose of Form

Amended forms. Withholding agents
filing an amended form must indicate
the amendment number (see top of form
below title, to the right of the “Amended”
checkbox). The amendment number
must be numeric and the length must be
exactly one digit. Any amended form
must have the same unique form
identifier as the original form that is
being amended. Each time that you
amend the same form (as determined
by the unique form identifier), you must
provide the amendment number in the
box provided on the form (using “1” for
the first amendment and increasing
sequentially for each subsequent
amendment). See Amended Forms,
later, for more information.

Use Form 1042-S to report certain
distributions that are made by publicly
traded trusts and qualified investment
entities (as defined under section 897(h)
(4)(A)). See Distributions Attributable to
Dispositions of U.S. Real Property
Interests by Publicly Traded Trusts and
Qualified Investment Entities, later.

List of foreign country codes. Form
1042-S filers must use the same list of
country codes used on other IRS forms
(for example, Forms 926, 1118, 3520,
and 8805). This list of foreign country
codes may be found at IRS.gov/
CountryCodes.
Note. Although the list of country codes
is maintained by Modernized e-File,
Form 1042-S filers who file
electronically will continue to use the
FIRE System. See the instructions for
Electronic Reporting, later. Also, if
applicable, the option to file Form
1042-S by paper is still available.
Foreign tax identification number
and date of birth. A financial institution
that files a Form 1042-S with respect to
a payment on an obligation that it
maintains at its U.S. office or U.S.
branch must report the recipient's
foreign tax identification number (FTIN)
and date of birth (if the recipient is an
individual). See Box 13i, Recipient's
Foreign Tax Identification Number and
Box 13l, Recipient’s Date of Birth, later,
for additional information regarding this
requirement.

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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.
Use Form 1042-S to report payments
of eligible deferred compensation items
or distributions from nongrantor trusts to
covered expatriates that are subject to
withholding under section 877A. See
Box 1, Income Code, later.

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 under
CAUTION chapter 3 or chapter 4 is liable
for such tax.

!

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
Instructions for Form 1042-S (2020)

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.
You must 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, Annual
CAUTION Withholding Tax Return for U.S.
Source Income of Foreign Persons. See
Form 1042 and its instructions for more
information.

!

Instructions for Form 1042-S (2020)

Where, When, and
How To File

Forms 1042-S, whether filed on paper
or electronically, must be filed with the
IRS by March 15, 2021. You also must
furnish Form 1042-S to the recipient of
the income by March 15, 2021.
Copy A is filed with the IRS. Send all
paper Forms 1042-S with Form 1042-T,
Annual Summary and Transmittal of
Forms 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.

Electronic filing requirement.
Financial institutions must file Forms
1042-S electronically. The IRS
encourages all other filers of Form
1042-S to file them electronically;
however, they are not required to do so
unless the number of forms they are
required to file exceeds a certain
threshold. See Electronic Reporting,
later, for details.
Attach only Copy A to Form

TIP 1042-T. Provide Copies B, C,

and D to the recipient of the
income. The withholding agent should
keep Copy E. All copies must match the
copy filed with the IRS. Any differences
between the copy of the form issued to
recipients and the copy filed with the
IRS will lead to delays in processing the
recipient's tax return. The IRS may
disallow claims for refund or credit for
amounts withheld reported on Form
1042-S if the form attached to such
claims differs from the copy that was
filed with the IRS.
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, you may
submit a second Form 8809 before the
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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 for more
information about filing
CAUTION extension requests
electronically instead of on a paper
Form 8809.

!

Electronic Reporting

Forms 1042-S filed for tax year 2020
must be filed electronically if:
• You are a person (including a
corporation, partnership, individual,
trust, or estate) that is required to file
250 or more Forms 1042-S.
• You are a financial institution
(whether U.S. or foreign) regardless of
the number of Forms 1042-S required to
be filed.
• You are a partnership that has more
than 100 partners or that is required to
file at least 100 Forms 1042-S.
The Taxpayer First Act of 2019,
enacted July 1, 2019,
CAUTION authorized the IRS and
Treasury to issue regulations that could
change the above rules. If those
regulations are issued and effective for
2020 tax year returns, we will post an
article at IRS.gov/Form1042S
explaining the changes.

!

Electronic submissions are filed
using the 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.

!

Note. Even though as many as 249
Forms 1042-S may be submitted on
paper, the IRS encourages filers to
transmit forms electronically.
Hardship waiver. To receive a
hardship waiver from filing 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.

Truncation of TIN Rules

Withholding agents may truncate the
recipient's TIN (social security number
(SSN), individual taxpayer identification
number (ITIN), or employer
identification number (EIN)) on the
recipient's copy of Form 1042-S (that is,
Copies B, C, and D), including a
substitute form. To truncate the
recipient's TIN, only the last four digits
of a TIN must be displayed and the
remaining digits must be replaced with
either asterisks (*) or Xs. For example,
an SSN or ITIN must be truncated on
the recipient's copy as XXX-XX-nnnn.
An EIN must be truncated as XXXXXnnnn.
Withholding agents may also
truncate a recipient’s FTIN on the
recipient’s copy of Form 1042-S (Copies
B, C, and D), including a substitute
form. The same rules for truncating a
recipient’s U.S. TIN stated above must
be followed if truncating a recipient’s
FTIN.
Note. The recipient's TIN and FTIN
must not be truncated on Copy A filed
with the IRS. The withholding agent's
EIN cannot be truncated on any copy.
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 for tax
law questions. The Information
Reporting Program also can be reached

by fax at 877-477-0572 (toll free) and
international fax at 304-579-4105 (not a
toll-free number).
If you have tax law questions
pertaining to Form 1042-S, call
267-941-1000 (not a toll-free number).

Additional Information

For more information on the withholding
of tax, see Pub. 515. To order this
publication and other publications and
forms, call 800-TAX-FORM
(800-829-3676). You can download or
print some of the forms and publications
you may need on IRS.gov/Forms.
Otherwise, you can go to IRS.gov/
OrderForms to place an order and have
forms mailed to you. You should receive
your order within 10 business days.

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. All substitute forms
must comply with the rules set forth in
Pub. 1179, General Rules and
Specifications for Substitute Forms
1096, 1098, 1099, 5498, and Certain
Other Information Returns. A substitute
of Form 1042-S that is furnished to the
recipient (Copy B, C, or D) must
conform in format and size to the official
IRS form and must contain the exact
same information as the copy filed with
the IRS. However, the size of the form
may be adjusted if the substitute form is
presented on a landscape oriented
page instead of portrait. Only one Form
1042-S may be submitted per page,
regardless of orientation. You may be
subject to a penalty for failure to furnish
a correct information return. See
Penalties, later.
Note. A withholding agent is required to
provide a recipient with a separate
substitute Form 1042-S for each type of
payment of income (as determined by
the income code in Box 1).
All of the fields on the substitute
form must match the copy filed
CAUTION with the IRS and must comply
with IRS standards (see Pub. 1179).
Any differences between the substitute
form issued to recipients and the copy
filed with the IRS will lead to delays in
processing the recipient's tax return.
The IRS may disallow claims for refund
or credit for amounts withheld reported
on Form 1042-S if the substitute form

!

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attached to such claims differs from the
copy that was filed with the IRS.
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
the official Form 1042-S, Copy A, you
may be subject to a penalty for failure to
file a correct information return. See
Penalties, later.

Account-by-Account Reporting
by Certain Financial Institutions
A U.S. financial institution or U.S.
branch of a foreign financial institution
maintaining an account within the
United States is required to report
payments of the same type of income
(as determined by the income code in
Box 1) made to multiple financial
accounts held by the same recipient on
a separate Form 1042-S for each
account. For this purpose, a financial
account is an account described in
Regulations section 1.1471-5(b)(1). See
instructions for Box 13k, Recipient’s
Account Number, later, for information
on designating each account with a
separate account number.

Combined Reporting
Procedures

Rev. Proc. 99-50 provides special
procedures for successor entities to use
combined information reporting under
chapter 3 in certain situations following
a merger or acquisition. A withholding
agent may also use these procedures
for purposes of reporting under
chapter 4.

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
Instructions for Form 1042-S (2020)

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).
Amount subject to withholding.
Generally, an amount subject to
chapter 3 withholding is an amount from
sources within the United States that is
fixed or determinable annual or
periodical (FDAP) income. FDAP
income is all income included in gross
income, including interest (as well as
OID), dividends, rents, royalties, and
compensation. Amounts subject to
chapter 3 withholding do not include
amounts that are not FDAP, such as
most gains from the sale of property
(including market discount and option
premiums), as well as other specific
items of income (such as interest on
bank deposits and short-term OID). See
Regulations section 1.1441-2.
Authorized agent. An agent is an
authorized agent for purposes of filing
Instructions for Form 1042-S (2020)

Form 1042 or making tax deposits and
payments on behalf of its principal
(payer) only if all five of the following
conditions apply.
1. There is a written agreement
between the payer and the person
acting as agent.
2. A Form 8655, Reporting Agent
Authorization, is filed with the IRS if the
agent is filing Form 1042 (in its own
name) on behalf of the payer.
3. The books and records and
relevant personnel of the agent are
available to the payer.
4. The payer remains fully liable for
the acts of its agent and does not assert
any of the defenses that otherwise may
be available.
5. If the agent is filing Form 1042 (in
its own name) on behalf of the payer,
the agent is reported as the withholding
agent in Boxes 12a through 12i and
information about the payer is reported
in Boxes 16a through 16e of the Form
1042-S.
A sponsoring entity is a reporting
agent with respect to withholdable
payments and must fulfill the above
conditions to be an authorized agent.
For more information 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
-5-

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) that is described in
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 (within the
meaning of Regulations section
1.871-15(i)) 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.
2. A payment made under a
specified notional principal contract or a
specified equity-linked instrument.

Exempt beneficial owner. An exempt
beneficial owner means a person that is
described in Regulations section
1.1471-6 and includes a foreign
government, a political subdivision of a
foreign government, a wholly owned
instrumentality or agency of a foreign
government or governments, an
international organization, a wholly
owned agency or instrumentality of an
international organization, a foreign
central bank of issue, a government of a
U.S. possession, certain retirement
funds, and certain entities wholly owned
by one or more exempt beneficial
owners. In addition, an exempt
beneficial owner includes any person
treated as an exempt beneficial owner
under an applicable Model 1 IGA or
Model 2 IGA.
Exempt recipient. An exempt recipient
is any payee that is exempt from the
Form 1099 reporting requirements.
Exempt recipients are not
exempt from withholding under
CAUTION chapter 3 of the Internal
Revenue Code unless they are U.S.
persons or foreign persons entitled to an
exemption from withholding under
chapter 3.

!

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.

deemed-compliant FFI (including a
reporting Model 1 FFI), or other entity
for chapter 4 reporting purposes.

Financial institution. A financial
institution generally means an entity that
is a depository institution, custodial
institution, investment entity, or an
insurance company (or holding
company of an insurance company) that
issues cash value insurance or annuity
contracts. See Regulations section
1.1471-5(e).

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.

Foreign financial institution (FFI). An
FFI is an entity described in Regulations
section 1.1471-5(d) or an entity treated
as a financial institution under an
Intergovernmental Agreement (IGA).
Deemed-compliant FFI. Under
section 1471(b)(2), certain FFIs are
deemed to comply with the regulations
under chapter 4 without the need to
enter into an FFI agreement with the
IRS. However, certain
deemed-compliant FFIs are required to
register with the IRS and obtain a GIIN.
These FFIs are referred to as
registered deemed-compliant FFIs.
See Regulations section 1.1471-5(f)(1).
Registered deemed-compliant FFIs also
include certain FFIs that satisfy the
requirements of an applicable IGA.
Nonparticipating FFI. A
nonparticipating FFI is an FFI that is not
a participating FFI, deemed-compliant
FFI, or exempt beneficial owner.
Participating FFI. A participating
FFI is an FFI that has agreed to comply
with the terms of an FFI agreement with
respect to all branches of the FFI, other
than a branch that is a reporting Model 1
FFI or a U.S. branch. The term
“participating FFI” also includes a
reporting Model 2 FFI and a QI branch
of a U.S. financial institution, unless
such branch is a reporting Model 1 FFI.
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 (GIIN). The GIIN is the
identification number that is assigned to
a participating FFI (including a reporting
Model 2 FFI), registered
-6-

Qualified intermediary (QI). A QI
is an intermediary or eligible entity that
is a party to a withholding agreement
with the IRS. A QI 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 Rev. Proc.
2017-15, available at IRS.gov/irb/
2017-03_IRB#RP-2017-15, and
IRS.gov/QualifiedIntermediary.
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 at IRS.gov/
businesses/international-businesses/
list-of-approved-kyc-rules. Branches
that operate in non-KYC approved
jurisdictions as intermediaries are
required to act as nonqualified
intermediaries. See the Instructions for
Form W-8IMY for more information on
the definition of a QI.
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 (NFFE).
An 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 NFFE. 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
Instructions for Form 1042-S (2020)

entities, active NFFEs, and entities
excluded from the definition of FFI
(excluded FFIs) described in
Regulations section 1.1471-5(e)(5).
Nonexempt recipient. A nonexempt
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 who is
treated as a nonresident alien pursuant
to Regulations section 301.7701(b)-(7)
for purposes of figuring out the
individual’s U.S. tax liability, 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. An
individual will not be treated as a U.S.
person for a tax year or any portion of a
tax year that the individual is a
dual-resident taxpayer who is treated as
a nonresident alien for purposes of
figuring his or her U.S. tax liability. 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 U.S.
CAUTION citizen or resident alien may
choose to be treated as a resident 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.

!

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
Instructions for Form 1042-S (2020)

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 derivatives dealer (QDD).
A QDD is a qualified intermediary that is
an eligible entity that agrees to meet the
requirements of Regulations section
1.1441-1(e)(6)(i) and the QI agreement.
An eligible entity is defined in
Regulations section 1.1441-1(e)(6)(ii).
To act as a QDD, the home office or
branch, as applicable, must qualify and
be approved for QDD status and must
represent itself as a QDD on its Form
W-8IMY and separately identify the
home office or branch as a recipient on
a withholding statement (if required).
Each home office or branch that obtains
QDD status is treated as a separate
QDD. See Regulations section
1.1441-1(e)(6) and Rev. Proc. 2017-15
for more information.
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 at IRS.gov/irb/
2010-24_IRB#NOT-2010-46. See also
Notice 2020-2 (2020-3 I.R.B. 327).
Recalcitrant account holder.
Generally, a recalcitrant account holder
is an account holder of a participating or
-7-

registered 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 a registered
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
Model 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.
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.
• 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 U.S. person. A specified
U.S. person is any U.S. person other
than a person identified in Regulations
section 1.1473-1(c).
Substantial U.S. owner. A substantial
U.S. owner is a specified U.S. person
described in Regulations section
1.1473-1(b). For purposes of filing this
form, a reporting Model 2 FFI reporting
an account held by a passive NFFE
should substitute the term “controlling
person that is a specified U.S. person”
for “substantial U.S. owner” and refer to
the applicable Model 2 IGA for the
definition of controlling person. A
territory NFFE that is not an excepted

NFFE determines its substantial U.S.
owners by applying the 10% threshold
in Regulations section 1.1473-1(b)(1).
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 such
CAUTION 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 generally any
payment of U.S. source FDAP income,
subject to certain exceptions. For
exceptions and additional information,
see Pub. 515 and 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.
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 Rev. Proc. 2017-21 at
IRS.gov/irb/2017-06_IRB#RP-2017-21
and Regulations section 1.1441-5.

-8-

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
they are from U.S. sources.
• Interest on deposits paid to
certain nonresident aliens.
Withholding agents must report certain
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 Rev. Proc. 2019-23,
2019-38 I.R.B. 725, available at
IRS.gov/irb/2019-38_IRB#REVPROC-2019-23 (or any superseding
Revenue Procedure that is effective as
of January 1, 2020). A payer may elect
to report interest described above paid
to any nonresident alien individual by
reporting all such interest.
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).
Instructions for Form 1042-S (2020)

• 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. If payers withhold tax, they
must report the interest and tax on Form
1042-S.
• 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 distributions from the
disposition of a U.S. real property
interest paid by a publicly traded trust or
a qualified investment entity (QIE), see
Distributions Attributable to Dispositions
of U.S. Real Property Interests by
Publicly Traded Trusts and Qualified
Investment Entities, later.
• Interest. Interest subject to reporting
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. Proceeds
from a wager placed in blackjack,
baccarat, craps, roulette, or big-6 wheel
are not amounts subject to reporting.
• Cancellation of indebtedness.
Agents must report income from the
cancellation of indebtedness 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
(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
Instructions for Form 1042-S (2020)

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 nonperiodic payment) is
reportable as interest and not as
notional principal contract income. See,
however, the separate reporting for
U.S.-source dividend equivalent
payments, later.
• Insurance premiums. Insurance
premiums from U.S. sources
(regardless of whether of not the
premium payments are subject to the
section 4371 excise tax) are
withholdable payments under chapter 4.
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.
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• 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 distributions attributable
to dispositions of U.S. real property
interests. See Distributions Attributable
to Dispositions of U.S. Real Property
Interests by Publicly Traded Trusts and
Qualified Investment Entities, 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 noncorporate 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. Report 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 are generally
not required to be reported on Form
1042-S. See, however, the reporting
requirements for deposit interest
described in Interest on deposits paid to
certain nonresident aliens in the bullet
list under Amounts Subject to Reporting
on Form 1042-S, earlier.
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 or dividend
equivalents. Do not report on Form
1042-S amounts paid on a notional
principal contract, other than a specified
notional principal contract (SNPC), if the
amounts are not effectively connected
with the conduct of a trade or business
in the United States. All amounts paid
on an SNPC that are treated as dividend
equivalent payments should be reported
as such on Form 1042-S.
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.

Distributions Attributable
to Dispositions of U.S.
Real Property Interests by
Publicly Traded Trusts
and Qualified Investment
Entities
Publicly traded trusts. 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 rules of
Regulations section 1.1445-5(c)(3).
Qualified investment entities (QIEs).
Special rules apply to 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)(ii)).
Look-through rule for QIEs. In most
cases, any distribution from a QIE to a
nonresident alien, foreign corporation,
or other QIE that is attributable to the
QIE’s gain from the sale or exchange of
a U.S. real property interest is treated as
gain recognized by the nonresident
alien, foreign corporation, or other QIE
from the sale or exchange of a U.S. real
property interest.
A distribution by a QIE to a
nonresident alien or foreign corporation
-10-

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 21%.
Certain exceptions apply to the lookthrough rule for distributions by QIEs.
Any distribution by a QIE with respect to
stock regularly traded on an established
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 (or 10% of
that stock in the case of REITs) at any
time during the 1-year period ending on
the date of the distribution. A distribution
by a REIT generally is not treated as
gain from the sale or exchange of a U.S.
real property interest if the shareholder
is a qualified shareholder (as described
in section 897(k)(3)). These
distributions may be included in the
shareholder's gross income as a
dividend (income code 06) from the
QIE, not as long-term capital gain.
In addition, a qualified foreign
pension fund or an entity all of the
interests of which are held by a qualified
foreign pension fund generally is not
subject to the look-through rule for
distributions by QIEs for purposes of
section 897(h).
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.
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 under Definitions, earlier) that
has effectively connected income 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.

Instructions for Form 1042-S (2020)

See Regulations section 1.1446-4 and
Pub. 515 for details.
If you are a nominee that is the

TIP withholding agent under section

1446, enter the PTP's name and
other required information in Boxes 15a
through 15i on Form 1042-S.
Partnerships (other than PTPs) 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.

Requirement To Withhold
Chapter 3 withholding. For purposes
of sections 1441 and 1442, a
withholding agent must withhold 30% of
any payment of an amount subject to
withholding under chapter 3 (defined
above) made to a payee that is a foreign
person (or is presumed to be a foreign
person) unless it can associate the
payment with documentation to treat the
payment as made to a foreign person
entitled to a reduced rate of or
exemption from withholding. For more
information, see Chapter 3
Responsibilities under Responsibilities
of a Withholding Agent To Obtain Form
W-8 in the Instructions for the Requester
of Forms W-8BEN, W-8BEN-E,
W-8ECI, W-8EXP, and W-8IMY. Also
see Pub. 515.
Chapter 4 withholding. For purposes
of chapter 4, a withholding agent must
withhold 30% of a withholdable payment
(defined earlier) made to an FFI that is
or is presumed to be a nonparticipating
FFI (defined earlier). It also applies to
withholdable payments made to certain
NFFEs that fail to identify their
substantial U.S. owners (or to certify
that they have none) under Regulations
section 1.1472-1(b). For more
information, see Chapter 4
Responsibilities under Responsibilities
of a Withholding Agent To Obtain Form
W-8 in the Instructions for the Requester
of Forms W-8BEN, W-8BEN-E,
W-8ECI, W-8EXP, and W-8IMY. Also
see Pub. 515.
A payment will be subject to
withholding under either chapter 3 or
chapter 4 but not both. If the payment is
of an amount subject to both chapter 3
and chapter 4 withholding, chapter 4
withholding takes precedence.
Instructions for Form 1042-S (2020)

Before Completing Form
1042-S

You must complete the following steps
before completing Form 1042-S.
Step 1. Determine if you have a Form
1042-S filing obligation. If you make a
payment described under Amounts
Subject to Reporting on Form 1042-S,
earlier, you are required to file Form
1042-S for that payment. Note that you
may have a Form 1042-S reporting
obligation even if withholding is not
required.
Step 2. Determine whether the
payment is:
• A “withholdable payment” under
chapter 4,
• An “amount subject to withholding
under chapter 3,”
• Both a withholdable payment and an
amount subject to withholding under
chapter 3, or
• Neither a withholdable payment nor
an amount subject to withholding under
chapter 3.
Be sure to carefully read through the
exceptions to “withholdable payment”
and the exemptions from withholding or
taxation provided under chapter 3 that
are included in Pub. 515. Note that
reporting and withholding are done
either under chapter 3 or chapter 4, not
both. However, even if reporting is done
under chapter 3, you may be required to
provide certain chapter 4 information.
Step 3. Determine the chapter indicator
to be entered in Box 3. The chapter
indicator is generally based on whether
amounts were withheld (or paid by the
withholding agent) under chapter 3 or
chapter 4. For example, if the payment
is a withholdable payment and it is
subject to chapter 4 withholding (see
Requirement To Withhold, earlier), enter
“4” in Box 3. If no withholding was
required on the payment, enter “3” in
Box 3. For additional information, see
the instructions for Box 3, later.
Note. You must always complete
Boxes 4a (chapter 4 exemption code)
and 4b (chapter 4 withholding tax rate)
regardless of the chapter indicator
entered in Box 3.
Note. If a payment is a withholdable
payment under chapter 4, you must
complete Boxes 4a (chapter 4
exemption code), 4b (chapter 4
withholding tax rate), and 13g (recipient
chapter 4 status code), even if the
payment is properly classified with a
chapter 3 indicator in Box 3.

-11-

Note. If a payment is properly classified
with a chapter 3 indicator in Box 3, the
withholding agent is not required to
complete Boxes 12e, 13h, 15e, and
16c, all of which request a GIIN.
Be sure to complete a separate Form
1042-S for:
• Each recipient of income,
• Each income type paid to the same
recipient, and
• Each amount to which a separate tax
rate was applied (if you withheld at more
than one tax rate for a specific type of
income that you paid to the same
recipient).

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 are not permitted to
report multiple types of income on a
single 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 16a through 16e 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.
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. If the request is
made after a Form 1042-S was filed
reporting the payment and tax withheld
to only one of the joint owners, you
should amend the originally filed Form
1042-S to allocate the payment and tax
withheld among the joint owners
accordingly and provide copies of the
amended forms to each recipient. 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. In any event, each Form
1042-S can only include the recipient
information (Boxes 13a through 13d) for
one of the beneficial owners. Form
1042-S must not be completed with
more than one of the joint owners as the
recipient.
In the case of joint owners,
Form 1042-S can only list one of
CAUTION the owners as the recipient in
Box 13a. Form 1042-S must not be
completed with more than one of the
joint owners as the recipient.

!

Example 1. 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, enter “3” in Box 3,
“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 13f
(individual), and “23” in Box 13g
(individual).
See Appendix C for a

TIP comprehensive analysis of this

Example 1 fact pattern,
including a step-by-step guide on how
to complete Form 1042-S in its entirety.
Payments to a qualified intermediary
(including a qualified derivatives
dealer), 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 QI acting as a QDD
with respect to a payment, a withholding
foreign partnership (WP), or a
withholding foreign trust (WT) should

complete Form 1042-S in most cases,
treating the QI, QDD, WP, or WT as the
recipient.
If a payment is being made to a QI
that is acting as a QDD with respect to
the payment, a U.S. withholding agent
should report the QDD as the recipient
showing the QDD as the recipient in
Box 13a (including any branch identifier
included on the withholding certificate
provided by the QDD) and using
recipient code 35 (qualified derivatives
dealer) as the chapter 3 status code.
See Payments allocated, or presumed
made, to U.S. nonexempt recipients,
later, for exceptions.
A QI that does not assume primary
withholding responsibility is required to
provide information regarding the
allocations 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 associated with
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 a
withholdable payment to an FFI that is 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
(nonreporting IGA FFI) or, for a payment
to a QI, 27 (exempt beneficial owner) as
the chapter 4 status code. A U.S.
withholding agent must use chapter 4
recipient code 48 (U.S. Payees Pool)
when reporting a reportable amount
allocated to a chapter 4 withholding rate
pool of U.S. payees of a QI and report
the chapter 3 recipient code 12
-12-

(qualified intermediary). A U.S.
withholding agent must not use any
chapter 3 pooled reporting code (codes
27 through 32) as such codes are only
to be used by a withholding agent that is
a QI, QSL, WP, or WT. See Amounts
Paid by Qualified Intermediaries, later,
and the instructions for Boxes 13f and
13g, later. 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
Amounts paid to a nonqualified
intermediary or flow-through entity, later,
and the presumption rules under
Regulations section 1.1471-3(f) when
such information is not provided for a
withholdable payment made to an
entity.
Example 2. 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
Instructions for Form 1042-S (2020)

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 “3” in Box 3, “00” in Box
3a (chapter 3 exemption code), “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)
and QI as the recipient in Box 13a 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 “4” in Box 3, 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 13a, 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. nonexempt recipients.
A QI may provide Forms W-9 or other
information regarding U.S. nonexempt
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. A QI may
also provide information regarding U.S.
nonexempt recipients on whom the QI
elects to 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. nonexempt recipients,
you must report income allocable to the
U.S. nonexempt recipients on the
appropriate Form 1099 and not on Form
1042-S even though you are paying that
income to a QI. The QI may also provide
information regarding U.S. nonexempt
recipients in a chapter 4 withholding rate
pool that the withholding agent must
report on Form 1042-S.

Instructions for Form 1042-S (2020)

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. nonexempt 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, available at IRS.gov/
1099GeneralInstructions.
Example 3. 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.
nonexempt 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 13a, 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 4. WA, a withholding
agent, makes a withholdable payment
of U.S. source dividends to QI, a
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
-13-

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 “3” in Box 3,
“00” in Box 3a (chapter 3 exemption
code), “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), QI as the
recipient in Box 13a, 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 “3”
in Box 3, “00” in Box 3a (chapter 3
exemption code), “30.00” 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), QI
as the recipient in Box 13a, 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 “4” in Box 3,
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), “30.00” in Box 4b
(chapter 4 tax rate), “Unknown
Recipient” as the recipient name in Box
13a, 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, status codes, country
code, address, GIIN, and QI-EIN must
be entered in Boxes 15a through 15i.
Substitute dividends paid to qualified securities lenders (QSLs). A
withholding agent that makes payments
of substitute dividends to a 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 and include
the applicable chapter 4 status code of
the QSL.
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.
• 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 chapter 3 exemption
code 11.
If the QSL is also a QI with primary
withholding responsibility, use chapter 3
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 using chapter 3
recipient code 05 (U.S. branch - treated
as a U.S. person) and chapter 4
recipient code 17 (U.S. branch - treated
as a U.S. person).
• 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 U.S. branch not
treated as a U.S. person fails to certify
that it will meet the requirements under
Regulations section 1.1471-4(d)(2)(iii)
(C), a withholding agent must report the
branch as an NPFFI.
• 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.

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 the owner is an FFI.

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.

Example 5. 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
nonfinancial 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 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.
A hybrid entity with multiple owners
may also claim treaty benefits. See
Form W-8BEN-E and its instructions for
more information on documentation
requirements that apply in such cases. If
a hybrid entity treated as a resident of a
treaty country claims treaty benefits on
a valid Form W-8BEN-E associated with
a withholdable payment (and chapter 4
withholding does not apply with respect
to any of its owners to such payment or
portion of such payment), the U.S.
withholding agent should complete a
Form 1042-S treating the hybrid entity
as a recipient, use code 26 (hybrid
entity making treaty claim) as the
chapter 3 recipient status code, and
leave blank the chapter 4 recipient
status code. To the extent, however,
that a portion of a withholdable payment
is allocated to an owner of the hybrid
entity for which chapter 4 withholding
must be applied, the U.S. withholding
agent must issue a separate Form
1042-S to such owner using the
applicable recipient codes for the
owner's chapters 3 and 4 status codes

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 and hybrid entities. If a U.S. withholding agent makes
a payment to a disregarded entity 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 identification
-14-

Instructions for Form 1042-S (2020)

and report the hybrid entity as the
intermediary. The withholding agent
must do so for each such owner for
which chapter 4 withholding applies and
must exclude amounts allocable to such
owners from the Form 1042-S issued to
the hybrid entity.
If an owner of a reverse hybrid entity
claims treaty benefits on a valid Form
W-8BEN-E or W-8BEN (and chapter 4
withholding does not apply with respect
to the payment to the reverse hybrid
entity), the U.S. withholding agent
should issue a Form 1042-S for the
portion of the payment allocable to each
such owner treating the owner as the
recipient, using the applicable recipient
codes for the chapter 3 and 4 status
codes, and report the reverse hybrid
entity as the intermediary in Boxes 15a
through 15i. In such a case, the U.S.
withholding agent must issue a Form
1042-S to the reverse hybrid entity for
the remainder of the payment treating
such entity as the recipient and using
the applicable chapters 3 and 4 status
codes. However, if chapter 4
withholding applies with respect to the
payment to the reverse hybrid entity, the
U.S. withholding agent must instead
issue a Form 1042-S to the reverse
hybrid entity for the entire payment and
withhold accordingly.
Example 6. WA, a withholding
agent, makes a withholdable payment
of interest to FP, a hybrid entity
organized in Country X. FP is treated as
a partnership under the Code but is
treated as a company resident in
Country X for Country X purposes. WA
has a Form W-8BEN-E from FP on
which it claims treaty benefits. WA also
has a Form W-8IMY from FP that
includes its chapters 3 and 4 statuses
and a W-8BEN-E from each of FP's
owners, FC1 and FC2, which certify that
FC1 is a PFFI and FC2 is an NPFFI. The
attached withholding statement
allocates 80% of the payment to FC1
and 20% of the payment to FC2. WA
must issue a Form 1042-S for 80% of
the payment to FP as the recipient using
recipient code 26 (hybrid entity making
treaty claim) as the chapter 3 status
code, and leaving blank the recipient
code for the chapter 4 status code. WA
must withhold under chapter 4 on the
remaining 20% of the payment allocated
to FC2 and issue a Form 1042-S to FC2
as the recipient using recipient code 15
(corporation) as the chapter 3 status
code and recipient code 15
(nonparticipating FFI) as the chapter 4
status code and must report FP as the
intermediary in Boxes 15a through 15i.
Instructions for Form 1042-S (2020)

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), GIIN (if
any), and status codes 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 (that is, pool of recalcitrant account
holders, pool of nonparticipating FFIs,
or 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 and
chapter 3 status code 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 7. 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
-15-

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 a
withholdable payment 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
(Form 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 which, if the payment is
a withholdable payment, will generally
require the withholding agent to
withhold 30% under chapter 4 because
such payment is presumed made to a
nonparticipating FFI. See Regulations
section 1.1471-3(f)(5). 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
13a 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,
TIN (if any), GIIN (if any), and status
codes of the FFI should be entered in
Boxes 15a through 15i.
If a U.S. withholding agent makes a
withholdable payment to an NQI or
flow-through entity that is a
nonparticipating FFI, the withholding
agent must treat the payments 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 (Form
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 13a 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
code, 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 13a, and
the name, country code, address,
chapter 4 status code, 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, 2021) 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 a
Form 1042-S for each recipient in the
pool on a pro-rata basis. The
withholding agent must check Box 15
(pro-rata basis reporting) on each Form
1042-S. For example, if there are four
account holders in a withholding rate
pool that receives a $100 payment and
the NQI fails to allocate more than $10
of the payment, the withholding agent
must file four Forms 1042-S, one for
each account holder in the pool,
showing $25 of the income to each and
Box 15 checked. If, instead, 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 a Form
1042-S for each recipient for which it
has allocation information and report the
unallocated part of the payment on a
Form 1042-S as made to an “unknown
recipient.” In this case, the withholding

agent does not check Box 15 on any of
the Forms 1042-S.
Payments allocated, or presumed
made, to U.S. nonexempt recipients.
You may be given Forms W-9 or other
information regarding U.S. nonexempt
recipients from an NQI or flow-through
entity together with information
allocating all or a part of the payment to
U.S. nonexempt recipients. You must
report income allocable to a U.S.
nonexempt 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 8. 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.
nonexempt recipients and Forms
W-8BEN from A and B and a Form W-9
from C, a U.S. nonexempt 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, treating FP as the
intermediary in Boxes 15a through 15i.
WA should also file a Form 1099-INT for
C.
Example 9. The facts are the same
as in Example 8, 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
nonparticipating FFI. A Form 1042-S
should be completed by entering “4” in
Box 3, “Unknown Recipient” in Box 13a,
recipient code 21 (unknown recipient)
as the chapter 3 status code, and
recipient code 29 (unknown recipient)
-16-

as the chapter 4 status code. Also, the
name, country code, address, status
codes, and TIN (if any) of FP should be
entered in Boxes 15a through 15i.
Example 10. The facts are the same
as in Example 9, 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 33% of the payment to a pool
of U.S. payees. With respect to the U.S.
pool of payees, WA must file a Form
1042-S showing FP as the recipient in
Box 13a and include FP's GIIN,
recipient code 08 as the chapter 3
status code (partnership other than a
withholding foreign partnership), and
recipient code 48 (U.S. payees pool) as
the chapter 4 status code. WA should
enter “3” in Box 3 as the chapter
indicator, leave Boxes 3a and 3b blank,
and enter exemption code 18 (U.S.
payees of a participating FFI or
registered deemed-compliant FFI) in
Box 4a and “00.00” in Box 4b.

Specified Federal Procurement
Payments Made to Foreign
Persons

Section 5000C imposes a 2% tax on
any foreign person that receives a
specified federal procurement payment.
A specified federal procurement
payment is a payment made to a foreign
person pursuant to a contract with the
U.S. government for (1) the provision of
goods that are manufactured or
produced in a country that does not
have an international procurement
agreement with the United States, or (2)
the provision of services in a country
that does not have an international
procurement agreement with the United
States.
For purposes of section 5000C, a
payer 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.
If you are reporting tax withheld
under section 5000C, enter “3” in 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. In Boxes 13a
Instructions for Form 1042-S (2020)

through 13d, include the name and the
address of the foreign person withheld
upon. If known, include the TIN (if any)
in Box 13e.

Amounts Paid by
Qualified Intermediaries
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 48 to allocate
payments made to its recalcitrant
account holders, payees that are
nonparticipating FFIs, and payees that
are U.S. persons. A QI should not use
chapter 4 reporting pool 49 (QIRecalcitrant 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. A 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 it must provide 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 13a and the
applicable recipient code for such entity
as the chapter 3 status code. 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
Instructions for Form 1042-S (2020)

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 section). If a QI uses a chapter 3
pooled reporting code (because
chapter 4 withholding does not apply
and the QI is not allocating the payment
to a U.S. pool of payees), it should leave
blank the recipient code for the
chapter 4 status code.
Example 11. 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, “00” in
Box 3a (chapter 3 exemption code),
“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 13a
(recipient's name), chapter 3 reporting
pool code 27 (withholding rate pool –
general) as the chapter 3 status code,
and a blank chapter 4 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 12. The facts are the same
as in Example 11, 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 to A and X) will contain the
same information as in Example 11. 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
-17-

(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 13a (recipient's name), chapter 3
code 28 (withholding rate pool – exempt
organization) in Box 13f, and a blank
chapter 4 status code in Box 13g. 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, code 12
(payee subjected to chapter 4
withholding) in Box 3a (chapter 3
exemption code), “00.00” in Box 3b
(chapter 3 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 13a (recipient's
name), chapter 4 recipient code 43
(recalcitrant pool-U.S. indicia) as the
chapter 4 status code in Box 13g, and a
blank chapter 3 status code in Box 13f.
Under the terms of its Qualified
Intermediary (QI) agreement
CAUTION with the IRS, a QI that is an FFI
may be required to report the amounts
paid to U.S. nonexempt 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.

!

A QI acting as a QDD must
separately report on Forms 1042-S
payments that it makes in its QDD
capacity. The QI should report the name
of the QDD that makes the payment as
the withholding agent in Box 12d
(following the naming protocol used for
applying to be a QDD) and should use
withholding agent code 35 as the
chapter 3 status code.
A QI acting as a QDD with
respect to a payment may only
CAUTION use chapter 3 pooled reporting
codes 27 and 28.

!

Amounts Paid to Private
Arrangement Intermediaries
In most cases, a QI must report
payments made to each private
arrangement intermediary (PAI)

(defined under Definitions, earlier) 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 (unless the QI is acting
as a QDD with respect to the payment).
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 13. 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
withholding based on their respective
chapter 4 statuses 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,
recipient code 29 (PAI withholding rate
pool – general) as the chapter 3 status
code, and a blank chapter 4 status
code, and should use chapter 4

exemption code 15 (payee not subject
to chapter 4 withholding) in Box 4a.

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 (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
an FFI may use the chapter 4 reporting
pool code 47 to allocate payments
made to the partnership’s or trust's
payees that are nonparticipating FFIs
and should report 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) or 32
(Agency withholding rate pool - exempt
organization) as the chapter 3 status
code (unless the QI is acting as a QDD
with respect to the payment). 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.

Payments made to another QI, QDD,
QSL, WP, or WT. The QI must
complete a Form 1042-S treating the
other QI, QDD (when a QI is acting as a
QDD with respect to a payment), 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
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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), GIIN (if any), and status codes 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 48 as the
chapter 4 status code and chapter 3
status code 25 (nonqualified
intermediary). 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 in Boxes 15a through 15i.
Example 14. 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 15. 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 nonconsenting U.S.
account under the applicable IGA and is
not required to withhold on payments to
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 an 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
Instructions for Form 1042-S (2020)

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 must show NQI as the recipient
and use reporting pool code 47
(nonparticipating FFI pool). The second
Form 1042-S must show the recipient
as “Unknown Recipient,” NQI's
information in Boxes 15a through 15i,
chapter 4 exemption code 19 (exempt
from withholding under IGA), chapter 4
status code 34 (nonconsenting U.S.
account), chapter 3 status code 21
(unknown recipient), 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, TIN (if
any), GIIN (if any), and status codes 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 the applicable chapter 3
status code for the flow-through entity
and use pooled reporting codes 42
through 48 as the chapter 4 status code.
Example 16. 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 based on their respective
chapter 4 statuses. 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 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
Instructions for Form 1042-S (2020)

Forms 1042-S must show information
relating to FP in Boxes 15a through 15i
along with the chapter 3 and 4 status
codes and chapter 4 exemption code 15
(payee not subject to chapter 4
withholding) 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 a
participating FFI or a registered
deemed-compliant 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
13a. 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
-19-

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, a beneficiary, or an 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
the 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
all recipients and should enter the
applicable chapter 3 and 4 exemption
codes.
If another withholding agent
underwithholds, regardless of whether 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
chapter 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 a 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).
See the instructions for Boxes 14a and
14b, later.
Example 17. 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 with 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
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 13a
and uses chapter 3 status code 25
(nonqualified intermediary), chapter 4
status code 43 (recalcitrant pool – U.S.
indicia), “30.00” in Box 4b (chapter 4 tax
rate), and $15 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, 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 18. 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
-20-

to a 30% rate of withholding, and
assuming it 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 3b, 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 the following.
• $50 per Form 1042-S if you correctly
file within 30 days after the required
filing date; the maximum penalty is
$565,000 per year ($197,500 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.
• $110 per Form 1042-S if you correctly
file more than 30 days after the due date
but by August 1; the maximum penalty
is $1,696,000 per year ($565,000 for a
small business).
• $280 per Form 1042-S if you file after
August 1 or you do not file correct
Forms 1042-S; the maximum penalty is
$3,392,000 per year ($1,130,500 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
$560 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 Forms 1042-S to recipients and
Instructions for Form 1042-S (2020)

cannot show reasonable cause, a
penalty of up to $280 may be imposed
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
$3,392,000 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 $280
penalty is increased to the greater of
$560 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
do the following.
• 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 provide your unique
form identifier at the top of the form as
well as the information requested in
Boxes 1, 2, 3, 7a, 12a, 12b, 12c, 12d,
12f (except if the withholding agent is a
U.S. person), 12h, 12i, 13a, 13b, 13c,
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 also
enter information in Boxes 4a, 4b, and
13g. If the amount reported in Box 2 is
an amount subject to chapter 3
withholding, you must enter information
in Boxes 12b, 12c, and 13f.
• If the amount reported in Box 2 is not
subject to chapter 4 withholding or is not
a withholdable payment, you must enter
“00.00” in Box 4b and provide the
applicable exemption code in Box 4a.
• 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

Instructions for Form 1042-S (2020)

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, either a chapter 3 status code (Box
13f) or chapter 4 status code (Box 13g)
is required.
• If the recipient in Box 13 or entity in
Box 15 is a participating FFI, registered
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 (to
the extent that you may rely on a
sponsored entity's GIIN under the
chapter 4 regulations or an applicable
IGA for withholding purposes).
• 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.
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, chapter 3 and 4 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–e
and 13h. In most cases, you must report
a foreign address. See the instructions
for Box 13, later.
• In the case of joint owners, Form
1042-S can only list one of the owners
as the recipient in Box 13a. Form
1042-S must not be completed with
more than one of the joint owners as the
recipient.
• The country code that you report in
Boxes 13b 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
-21-

specifically allowed in these
instructions.
• For direct account holders, you must
report the recipient's account number in
Box 13k. You may also be required to
report the recipient's foreign TIN, an
LOB code (for an entity claiming treaty
benefits), and the recipient's date of
birth in Boxes 13j and 13l (see the
instructions for Box 13j and Box 13l,
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
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 13b must be
a valid treaty country. Countries with
which the United States has a tax treaty
are listed at IRS.gov/Businesses/
International-Businesses/United-StatesIncome-Tax-Treaties-A-to-Z.
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 must round off cents to whole
dollars. 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.

Unique Form Identifier

A withholding agent must provide a
unique form identifier number on each
Form 1042-S that it files in the Box

provided at the top of the form. The
unique form identifier must:
• Be numeric (for example,
1234567891),
• Be exactly 10 digits, and
• Not be the recipient's U.S. or foreign
TIN.
If a withholding agent is filing an
amended Form 1042-S, it must include
the same unique form identifier that was
reported by the withholding agent on the
original Form 1042-S that is being
amended. The unique form identifier will
be used to identify which information
return is being corrected or amended
when multiple information returns are
filed by a withholding agent with respect
to the same recipient. The identifying
number must be unique to each original
Form 1042-S filed for the current year.
The identifying number can be used on
a new original form in a subsequent
year.

Amended Checkbox
See Amended Forms, later.

Amendment Number

If you are filing an amended Form
1042-S, you must provide an
amendment number. The amendment
number must be numeric and the length
must be exactly one digit. Each time
that you amend the same form (as
determined by the unique form
identifier), you must provide the
amendment number in the box provided
on the form (using “1” for the first
amendment and increasing sequentially
for each subsequent amendment).

Box 1, Income Code

All filers must enter the appropriate
two-digit income code from the list in
Appendix A, later. 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 06 for dividends,
including any deemed dividends (such
as deemed dividends arising under
section 305(c)). However, use other
codes for dividends (including deemed
dividends) paid on actively traded
securities.
2. Use code 09 for the following
types of capital gain.
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.
d. Certain gains from the sale or
exchange of original issue discount
obligations issued after March 31, 1972.
3. Use code 17 for payments for
independent personal services
performed by a foreign person. This
includes payments that are subject to
the business profits article of a treaty.
4. Use code 29 (deposit interest) if
you are paying bank deposit interest,
not code 01 (interest paid by U.S.
obligors-general).
5. Use code 24 (qualified
investment entity (QIE) distributions of
capital gains) for distributions of capital
gains from a QIE. Use code 36 (capital
gains distributions) for capital gain
distributions (dividends) paid or credited
by mutual funds (or other regulated
investment companies). Include
long-term and short-term capital gain
dividends (use exemption code 02
(exempt under IRC (other than portfolio
interest)) in Box 3a).
Note. Exempt-interest dividends and
interest-related 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).
6. 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.
7. Use code 33, 34, 35, 53, or 54 for
all substitute payment transactions. For
more information, see Regulations
sections 1.861-2(a)(7) and 1.861-3(a)
(6). For payments of interest or
substitute interest made by a
withholding agent to a QI that assumes
primary withholding responsibilities for
substitute interest, the withholding agent
and the QI should use code 33 or 54.
For payments of dividend equivalent
payments made by a withholding agent
to a QI acting as a QDD, a withholding
agent and a QI should use code 34 or
53. See Rev. Proc. 2017-15 for more
information on when a QI assumes
primary withholding responsibilities for
-22-

substitute interest or dividend equivalent
payments.
8. 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.
9. Use codes 38 and 39 for
payments to covered expatriates. Use
code 38 for a payment of eligible
deferred compensation subject to
section 877A(d)(1) and use code 39 for
a distribution from a nongrantor trust
subject to section 877A(f)(1). For more
information, see Notice 2009-85.
10. Use code 40 (other dividend
equivalents under IRC section 871(m))
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 or 53.
11. 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.
12. 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.
13. 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).
Also use code 50 for income reported
on a Form 1042-S in a prior calendar
year for which tax withheld was not
deposited pursuant to the escrow
procedure for undetermined amounts of
income and such withheld tax is now
required to be deposited in the current
calendar year. For additional
Instructions for Form 1042-S (2020)

information on the escrow procedure for
undetermined amounts of income, see
Regulations section 1.1441-3(d)(1). For
instructions on reporting amounts
withheld during the current calendar
year that you are not depositing
pursuant to the escrow procedure, see
the instructions for Box 7, later.
14. 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), 54 (substitute
payments-interest from 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.
15. Use code 55 (taxable death
benefits on life insurance contracts) to
report taxable death benefits, such as
benefits paid on an insurance contract
that was acquired on a transfer for
valuable consideration. See section 101
for when death benefits are taxable.
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 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 which a
Form 1042-S is required). 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 (in whole dollars) to or
on behalf of the recipient during the
calendar year, including withheld tax.
Instructions for Form 1042-S (2020)

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.
• If reporting payments to artists or
athletes who have signed a central
withholding agreement (income code
43), you must report the gross amount
paid to the artist or athlete in Box 2
(without any consideration to the
expenses to be taken into account for
purposes of determining the amount of
withholding tax pursuant to the central
withholding agreement).

Box 3
Chapter indicator. If you are reporting
amounts in Boxes 7 through 9, enter
either a “3” or “4” to indicate whether the
amounts were withheld (or paid by the
withholding agent) pursuant to chapter 3
or chapter 4. If you are reporting tax
withheld under section 5000C, or
backup withholding was applied under
the presumption rules, enter “3” as if the
tax were a chapter 3 tax.
Note. Either a “3” or “4” (but not both)
must be entered on each Form 1042-S.
If you are not reporting amounts in
Boxes 7 through 9 because you did not
withhold under chapter 3 or 4, you
should enter “3.”
-23-

If you are reporting payments to U.S.
payees, enter “3” and leave Boxes 3a
and 3b blank.

Boxes 3a and 4a, Chapter 3 and
Chapter 4 Exemption Codes

In most cases, if the tax rate you
entered in Box 3b or 4b is 00.00, you
may be required to enter the appropriate
exemption code (01 through 23) from
Appendix B, later, as applicable for
chapter 3 and 4 purposes. In certain
cases, more than one exemption code
will apply. See the instructions below 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 the tax rate you entered in
Box 4b is 00.00, you must enter the
applicable exemption code (13 through
21) 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 13e if you report 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 Boxes 3a and 4a.
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.
However, if the payment is made to a QI
that is acting as a QDD with respect to
the payment, the withholding agent
should instead use exemption code 22
(QDD that assumes primary withholding
responsibility).
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.
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)
for chapter 3 purposes 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) for chapter 3
purposes 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) for
chapter 3 purposes 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 it
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) for chapter 3
purposes 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
chapter 3 exemption code 23 for
distributions made by a real estate
investment trust (REIT) to a qualified
foreign pension fund (or an entity all of
the interests of which are held by a
qualified foreign pension fund) that are
exempt under section 897(l).

Chapter 4 Exemption Codes
A withholding agent should use
exemption code 13 (grandfathered
payment) for chapter 4 purposes only if
the withholding agent makes a payment
under a grandfathered obligation (as
defined in Regulations section
1.1471-2(b)(2)) 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) for chapter 4
purposes if the payment is a
withholdable payment (as defined in
Regulations section 1.1473-1(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) for chapter 4
purposes for payments described in
Regulations section 1.1473-1(a)(4)(iii).
However, the withholding agent should
only use exemption code 16 if it is the
only exemption code that applies. If
another exemption code applies, it
should be used instead of exemption
code 16.
A withholding agent should use
exemption code 17 (foreign entity that
assumes primary withholding
responsibility) for chapter 4 purposes
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) for chapter 4
purposes 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)
for chapter 4 purposes 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 (Other–payment not
subject to chapter 4 withholding) for
chapter 4 purposes if the payment is
exempt from chapter 4 withholding and
no other chapter 4 exemption code
applies. A withholding agent should also
use exemption code 21 (Other–payment
not subject to chapter 4 withholding)
when using income code 37 (return of
capital) to report nondividend payments.
-24-

If you have failed to provide a
withholding agent with appropriate
information regarding the status of the
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–d along
with the other required information for
the recipient; and
• 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.
If you submit Form 1042-S as
described above, you must also
CAUTION submit Form 1042 and issue a
Form 1042-S to each recipient
(including any unknown recipient or U.S.
payee) of the income to which
withholding was applied.

!

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 as if the payment had been later
determined to be 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, enter “4” as the
chapter indicator in Box 3 to show that
withholding was applied under
chapter 4.

Boxes 3b and 4b, Chapter 3
and Chapter 4 Tax Rates

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.” If
the amount reported in Box 2 is not
subject to chapter 4 withholding or is not
a withholdable payment, you must enter
“00.00” in Box 4b and provide the
Instructions for Form 1042-S (2020)

applicable exemption code in Box 4a.
For purposes of chapter 3 withholding,
see Valid Tax Rate Table. 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 required 30%)
and the NQI withholds an additional
15% under chapter 3, the NQI should
report “30.00” in Box 3b. See
Example 18, earlier, under Multiple
Withholding Agent Rule. 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 of
CAUTION income that you paid to the
same recipient, you must file a separate
Form 1042-S for each amount to which
a separate rate was applied.

!

Valid Tax Rate Table
00.00

10.00

24.00

02.00

12.00

25.00

04.00

12.50

27.50

04.90

14.00

28.00

04.95

15.00

30.00

05.00

17.50

37.00

07.00

20.00

08.00

21.00

Exception for central withholding
agreements. If you are the designated
withholding agent who has entered into
a central withholding agreement and
Instructions for Form 1042-S (2020)

you report an amount in Box 2 using
income code 43 (earnings as an artist or
athlete—central withholding
agreement), you must enter a tax rate in
Box 3b and you must include a
chapter 4 exemption code 16 (excluded
nonfinancial payment) 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). If you are a designated
withholding agent that has entered into
a central withholding agreement with the
IRS, leave this box blank and report the
gross amount paid to the recipient in
Box 2. 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 7a Through 11,
Federal Tax Withheld
Box 7a. Enter the total amount of U.S.
federal tax you actually withheld in Box
7a under chapter 3 or 4. If you did not
withhold any tax, enter “-0-.”

!

CAUTION

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

Box 7b. A withholding agent that
withheld tax during the calendar year
and that was not required to deposit
with the IRS the tax withheld during the
calendar year pursuant to the escrow
procedure under Regulations sections
1.1471-2(a)(5)(ii) and/or 1.1441-3(d)
must check Box 7b (federal tax withheld
was not deposited with the IRS because
escrow procedures were applied). A
withholding agent reporting payments
pursuant to the escrow procedure must
report such payments on separate
Forms 1042-S. Box 7b must only be
checked when using the escrow
procedures as specified above.
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
-25-

amount subject to chapter 3 withholding
and tax is withheld and deposited under
chapter 3, do not check Box 7b.
Instead, enter “3” in Box 3 and complete
Box 3b to report the tax withheld under
chapter 3.
Box 7c. Check box 7c if you are a
partnership that received an amount
subject to withholding during the 2020
calendar year (preceding year) and you
are withholding on the amount includible
in a foreign partner’s share after March
15 of the subsequent year (2021). Only
check this box if you designated the
deposit as attributable to the preceding
year (2020). In such a case, the
partnership will be required to report the
associated income and tax withheld on
Forms 1042 and 1042-S for the
preceding year. If a partnership
withholds on a foreign partner’s share of
income after March 15 of the
subsequent year, the due date for filing
and furnishing the applicable Form(s)
1042-S is September 15 of the
subsequent year (2021). For example, if
a partnership withholds on April 1, 2021,
with respect to a foreign partner’s share
of undistributed income for the 2020
calendar year, the partnership may
designate the deposit as made for 2020
and report the liability and tax withheld
on the 2020 Form 1042 and the 2020
Form 1042-S for the partner. The
partnership must also ensure that its
Chapter 3 status code on such forms
properly reflects its status as a
partnership (including as a Withholding
Foreign Partnership (WP)). The
extended deadline of September 15,
2020, is also applicable when a
partnership is reporting on Form 1042-S
an allocation of income made after
March 15 of the subsequent year to a
foreign partner for the prior year, but no
withholding is required on the income. In
such a case, box 7c must also be
checked even if there is no withholding.
For more information, see proposed
regulations issued on December 18,
2018 (83 FR 64757).
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.
Box 9, Overwithheld tax repaid to recipient pursuant to adjustment procedures. This box should be
completed only if you repaid a recipient
under the reimbursement or set-off
procedures during the 2021 calendar
year in accordance with the
requirements of Regulations section

1.1461-2(a)(2) or (3) (for withholding
under chapter 3), or Regulations section
1.1474-2(a)(3) or (4) (for withholding
under chapter 4).
If you repaid the recipient under the
reimbursement or set-off procedure
during the 2020 calendar year, do not
complete Box 9. Instead, reduce the
amount of withholding reported in Box
7a.
In most cases, an intermediary or
flow-through entity should not enter an
amount in Box 9 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.
The adjustment for amounts
overwithheld does not apply to
CAUTION partnerships or nominees
required to withhold under section 1446.

!

Note. If the withholding agent meets
the above requirements, the withholding
agent may make adjustments to
overwithholding using either the
reimbursement or set-off procedures
until the extended due date for filing
Form 1042-S (or, if earlier, the date on
which the Form 1042-S is either filed or
furnished). Additionally, a withholding
agent may use the extended due date
for filing a Form 1042 to claim a credit
for any adjustments made to
overwithholding.
Box 10. Enter in Box 10 the combined
amounts reported in Box 7a (federal tax
withheld), Box 8 (tax withheld by other
agents), and Box 9 (overwithheld tax
repaid to recipient pursuant to
adjustment procedures).
Example. If the box 7a amount is
$600, the box 8 amount is $120, and the
box 9 amount is ($50), the box 10
amount will equal $670.

!

CAUTION

Box 10 must be completed in all
cases, even if no tax has been
deposited.

Box 11, Tax paid by withholding
agent (amounts not withheld). Enter
the total amount of tax paid by you and
not withheld from the payment to the
recipient. The amounts reported in Box
11 should be the amounts paid by the
withholding agent from its own funds
rather than through withholding from the
payment to the recipient. Any amount
reported in this box must not be
included in Box 10.

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

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. The Withholding
Agent's EIN cannot be truncated.
If you don’t have an EIN, you may
apply for one online by visiting IRS.gov/
EIN. If you are outside the United
States, you may also apply for an EIN
by calling 267-941-1099 (not a toll-free
number). You may also apply for an EIN
by faxing or mailing Form SS-4 to the
IRS. 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) under
Definitions, earlier, for more
information.)

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

Enter the withholding agent status
code(s) from the list of Recipient Status
Codes in Appendix B, later. You must
enter both a chapter 3 and a chapter 4
withholding agent status code
regardless of the type of payment being
made. If you are a U.S. financial
institution (USFI), indicate your
chapter 4 status code as 01, except
when a foreign branch of a USFI issues
Form 1042-S (in such a case, indicate
the chapter 4 status code as 50).

Boxes 12d Through 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.
Note. On statements furnished to
individual recipients of U.S. source
-26-

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.
Box 12f, Country code. You must
enter the code (from the list at IRS.gov/
CountryCodes) for the country for which
you are resident under that country's tax
laws. Enter “OC” (other country) only
when the country of residence does not
appear on the list.
Note. If the withholding agent is a U.S.
person or a foreign branch of a U.S.
person, enter “US” in box 12f (even
though “US” is not a code on the list at
IRS.gov/CountryCodes).

Boxes 13a Through 13d,
Recipient's Name, Country
Code, and Address
Box 13a, Recipient's name. Enter the
complete name of the recipient in Box
13a.
• If you do not know the name of the
recipient, or are required to use the
recipient status codes for an unknown
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 13a.
• 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 13a 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 13a through 13g.

Instructions for Form 1042-S (2020)

• In the case of foreign joint owners,
Form 1042-S can only list one of the
owners as the recipient in Box 13a.
Form 1042-S must not be completed
with more than one of the joint owners
as the recipient.
• If the recipient is a QI acting as a
QDD with respect to the payment, enter
the name of the QDD (including any
branch identifier included on the Form
W-8IMY provided by the QDD).
• If a disregarded entity (or a branch)
that is required to provide a TIN on
Form W-8IMY is identified in Part II of
the Form W-8BEN-E, include the name
of the disregarded entity (or the
jurisdiction of the branch) in a
parenthetical after the name of the
recipient.
Box 13b, Recipient's country code.
You must enter the code (from the list at
IRS.gov/CountryCodes) 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). If the recipient is
unknown, leave Box 13b blank and
enter "Unknown Recipient" in Box 13a,
Recipient's name. 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, QSL, 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 Box
CAUTION 3a or if a reduced rate of
withholding based on a tax treaty is
entered in Box 3b, the country code
entered in Box 13b must be a country
with which the United States has
entered into an income tax treaty.

!

Boxes 13c and 13d, Recipient's address. In most cases, you must enter a
foreign address in Boxes 13c and 13d.
However, there are limited exceptions.
For example, you may enter a U.S.
address when reporting payments of
scholarship or fellowship grants (income
code 16).

Instructions for Form 1042-S (2020)

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 13k.

Boxes 13e and 13h,
Recipient's U.S. TIN and
GIIN

You must obtain and enter a U.S. 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. 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, 53, or
54.
• 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.
-27-

• 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.
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 13f and 13g,
Recipient’s Chapter 3 and
Chapter 4 Status Codes

Enter the recipient status code from the
list of Recipient Status Codes in
Appendix B, later. The following special
instructions apply for chapter 3 status
codes.
• If income code 42 (earnings as an
artist or athlete - no central withholding
agreement) or 43 (earnings as an artist
or athlete - central withholding
agreement) is used in Box 1, 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. You
may, however, use recipient code 08 as
the chapter 3 status code if you are
using a chapter 4 pooled reporting code
with respect to a payment made to a
nonwithholding foreign partnership. See
the instructions later on use of recipient
codes when reporting pools. 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 a QI may use recipient codes 29
(PAI withholding rate pool – general)
and 30 (PAI withholding rate pool –
exempt organizations). Only a QI, WP,
or WT that made a pooled reporting
election for chapter 3 purposes may use
recipient codes 31 (agency withholding
rate pool – general), 32 (agency
withholding rate pool – exempt
organization), 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). A QI
acting as a QDD should only use pooled
reporting codes 27 and 28. If you are a
QI (including a QI acting as a QDD),
WP, WT, or QSL using a chapter 3
pooled reporting code with respect to a
payment, do not include a chapter 4
status code unless making such
payment to a PAI or certain partnerships
or trusts. See Amounts Paid to Private
Arrangement Intermediaries and
Amounts Paid to Certain Partnerships
and Trusts, earlier.
• Use recipient code 35 (qualified
derivatives dealer) if you make a
payment to a QI that is acting as a QDD
with respect to the payment (or recipient
code 13 if you make a payment to a QI
that is acting as a QSL).
• 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.
• If you are making a withholdable
payment to a U.S. branch of an FFI, use
the applicable chapter 4 status code for
the country of residence for an entity
that is a participating FFI or registered
deemed-compliant FFI. Otherwise, use
the chapter 4 status code for any other
foreign branch of the entity that is a
participating FFI or registered
deemed-compliant FFI.
• 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 17 (U.S. branch treated as a U.S. person) if you are
making a payment to a U.S branch
treated as a U.S. person.
• 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 not 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 not
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. You may also
use recipient code 29 if you are
reporting a withholdable payment to a
recipient that is not subject to
withholding under the terms of an IGA
and the recipient's account is not
required to be reported as a U.S.
account or nonconsenting U.S. account
-28-

(for example, an undocumented
individual with no U.S. indicia).
• Use recipient code 33 (U.S.
reportable account) if you are reporting
the recipient's account as a U.S.
reportable account under the terms of a
Model 1 IGA and the recipient does not
meet the applicable requirements to be
included in a pool of U.S. payees
because the account holder is subject to
chapter 3 withholding.
• Use recipient code 34
(Nonconsenting U.S. account) if you are
reporting the recipient's account as a
nonconsenting U.S. account under the
terms of a Model 2 IGA and the recipient
does not meet the applicable
requirements to be included in a pool of
U.S. payees because the account
holder is subject to chapter 3
withholding.
• 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 the 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 (that is, 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).
• 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 (or with a chapter 4
withholding rate pool), you must report
the recipient as “Unknown Recipient”
and include the entity's information in
Boxes 15a through 15i (to the extent
provided).
Instructions for Form 1042-S (2020)

• If you are reporting a chapter 4
pooled reporting code with respect to a
withholdable payment to an
intermediary or flow-through entity, use
the chapter 3 status code for the
intermediary or flow-through entity as
the recipient code.
• 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.
• If you are making a withholdable
payment to a recipient that is a
restricted distributor (as defined in
Regulations section 1.1471-5(f)(4)), use
recipient code 10 (certified
deemed-compliant FFI - other).

Box 13i, Recipient's
Foreign Tax Identification
Number

Use Box 13i to enter the recipient’s
identification number used in the
recipient’s country of residence for tax
purposes.

You must obtain and enter an FTIN
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 (see instructions for Boxes 13e
and 13h, earlier).
• Any recipient of a payment made with
respect to a financial account (as
defined in Regulations section
1.1471-5(b)) maintained at your U.S.
office or branch, if you are a financial
institution, to the extent that such
recipient has furnished a withholding
certificate that provides an FTIN, or you
obtain the FTIN under the alternative
procedures described in Regulations
section 1.1441-1(e)(2)(ii)(B), or the
recipient's FTIN is identified in any of
your electronically searchable
information. See Regulations section
1.1441-1(e)(2)(ii) for more information
regarding a withholding agent's
obligation to obtain and report a
recipient's FTIN.

Box 13j, LOB Code

If you are making a payment for which a
beneficial owner that is an entity has
claimed a reduced rate of withholding
under an income tax treaty and has
provided documentation that
establishes the limitation on benefits
(LOB) article under which the beneficial
Instructions for Form 1042-S (2020)

owner qualifies, enter the applicable
LOB code from Appendix B, later. See
the instructions for Form W-8BEN-E for
a description of each of the LOB codes.
If you are a QI, WP, or WT reporting a
chapter 3 pool for which a reduced rate
of withholding under an income tax
treaty applies, do not include an LOB
code.

Box 13k, Recipient’s
Account Number

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
U.S. branch, you must report the
recipient’s account number in Box 13k.
If the amount is paid through a
nonqualified intermediary or
flow-through entity, you are not required
to use this box.
Note. A U.S. financial institution or a
U.S. branch of an FFI is required to
report payments of the same type of
income (as determined by the income
code in Box 1) made to multiple
financial accounts held by the same
beneficial owner at a U.S. office of such
institution on a separate Form 1042-S
for each account. For this purpose, a
financial account is an account
described in Regulations section
1.1471-5(b)(1). Report the identifying
number assigned to such account (or its
functional equivalent in the absence of
an account number for the recipient).

Box 13l, Recipient’s Date
of Birth

Use Box 13l to enter the recipient’s date
of birth. The correct format if entered is
YYYYMMDD (for example, enter
“20001205” for a date of birth of
December 5, 2000). A financial
institution making a payment with
respect to a financial account (as
defined in Regulations section
1.1471-5(b)) maintained at its U.S.
office or U.S. branch must report the
recipient's date of birth (if the recipient is
an individual) to the extent that such
recipient has furnished documentation
that provides a date of birth or the
recipient's date of birth is identified in
any of the withholding agent's files. See
Regulations section 1.1441-1(e)(2)(ii)
(B) for more information regarding a
withholding agent's obligation to obtain
and report a recipient's date of birth.

-29-

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

If you are an intermediary or
flow-through entity reporting amounts
withheld by another withholding agent
(the primary withholding agent) in Box 8,
you must provide the name and EIN of
the withholding agent that withheld the
tax. 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. Otherwise, leave
blank.

Box 15, Pro-Rata Basis
Reporting Checkbox

Withholding agents must check Box 15
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.

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

If you are reporting amounts paid to a
recipient whose withholding certificates
or other documentation has been
submitted to you (or should have 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. If you are
making a payment to a U.S. branch not
treated as a U.S. person that has
certified that it is applying the rules in
Regulations section 1.1471-4(d)(2)(iii)
(C) (in order to avoid being withheld
upon under chapter 4), use chapter 4
intermediary code 18 (U.S. branch - not

treated as a U.S. person (reporting
under section 1471)).
Note. A withholding agent that is 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/CountryCodes for the country
where the intermediary or flow-through
entity is located.
Box 15g, Intermediary or
flow-through entity's foreign tax
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.
If you are a nominee that is the
withholding agent under section 1446,
enter the PTP's name and other
information in these boxes.

Boxes 16a Through 16e,
Payer's Name, TIN, GIIN,
and Status Code

See the definition of Authorized agent,
earlier, under Definitions. Include the
payer's name, TIN, and GIIN if different
from the withholding agent shown in
Boxes 12a, 12d, and 12e.
If payment is being made by a
transfer agent or a paying agent acting
as a withholding agent on behalf of a
payer, enter the chapter 3 and 4 status
codes applicable to the status of the
payer in Boxes 16d and 16e.

Boxes 17a Through 17c,
State Income Tax Withheld
and Related Information

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

Amended Forms

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. The amended
form must have the same unique form
identifier as the original form that is
being amended. You must check the
“Amended” box and provide the
amendment number. The amendment
number must be numeric and the length

must be exactly one digit. Each time
that you amend the same form (as
determined by the unique form
identifier), you must provide the
amendment number in the box provided
on the form (using “1” for the first
amendment and increasing sequentially
for each subsequent amendment).
If you provide an amended
Form 1042-S to a recipient, you
CAUTION must also file the amended form
with the IRS.

!

Do not file an amended return if you
provided Form 1042-S to the recipient
(copies B, C, and D) and need to make
corrections to such form prior to filing
with the IRS. In such a case, you should
file an original Form 1042-S with the
correct information. Do not check the
Amended box or indicate any
Amendment Number. Provide a copy of
the corrected Form 1042-S to the
recipient. Note that the copies of the
Form 1042-S provided to the recipients
(copies B, C, and D) must match the
copy of the Form 1042-S that is filed
with the IRS.
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 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 and enter the
amendment number.
Amended checkbox. Enter an “X” in
the amended checkbox of Copy A, B, C,
D, and E only if you are amending a
Form 1042-S you previously filed with
the IRS. You must provide statements to
recipients showing the corrections as
soon as possible regardless of the
change to the Form 1042-S.
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

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 to 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.
If you have comments concerning the
accuracy of these time estimates or
suggestions for making this form
simpler, we would be happy to hear
from you. You can send us comments
from IRS.gov/FormComments. 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 fail to correct Form(s)
1042-S, you may be subject to a
penalty. See Penalties, earlier.

-30-

Instructions for Form 1042-S (2020)

Appendix A
Box 1 Income Codes
Code
01
02
03
04
05
22

Interest Income

16
17
18
19
20
23
24

Scholarship or fellowship grants
Compensation for independent personal services2
Compensation for dependent personal services2
Compensation for teaching2
Compensation during studying and training2
Other income
Qualified investment entity (QIE) distributions of capital gains

25
26

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)

31

Short-term OID

27

33
51

Substitute payment – interest
Interest paid on certain actively traded or publicly offered
securities1
Substitute payments – interest from certain actively
traded or publicly offered securities1

28

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

32

Notional principal contract income4

43

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
Earnings as an artist or athlete – central withholding agreement5

44

Specified federal procurement payments

50

Income previously reported under escrow procedure6

55

Taxable death benefits on life insurance contracts

54
Code
06
07

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

35
36
37
38

08

Dividends paid by foreign corporations

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

52
53
Code
09
10
11
12
13
14
15

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

1
This code should only be used if the income paid is described in Regulations section 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 interest from a notional principal contract where nonperiodic payment(s) are treated as a loan.
5
Income Code 43 should only be used if Letter 4492, Venue Notification, has been issued by the IRS (otherwise, use Income Code 42 for earnings
as an artist or athlete). 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 for this form for further explanation.
2
3

-31-

Appendix B
Exemption Codes, Recipient Status Codes, and Box 13j LOB Codes
Boxes 3a
and 4a.

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

Code

Authority for Exemption

Chapter 3
01
02
03
04
05
06
07
08
09
10
11
12
22
23

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
QDD that assumes primary withholding responsibility
Exempt under section 897(l)

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26

Withholding Foreign Trust
Qualified Intermediary
Qualified Securities Lender – Qualified Intermediary
Qualified Securities Lender – Other
Corporation
Individual
Estate
Private Foundation
International Organization
Tax Exempt Organization (Section 501(c) entities)
Unknown Recipient
Artist or Athlete
Pension
Foreign Central Bank of Issue
Nonqualified Intermediary
Hybrid entity making Treaty Claim

13

Grandfathered payment

35

Qualified Derivatives Dealer

14
15
16
17

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
Other – payment not subject to chapter 4 withholding

36
37

Foreign Government – Integral Part
Foreign Government – Controlled Entity

Chapter 4

18
19
20
21

Boxes 12b, 12c, 13f, 13g, 15b, 15c, 16d, and 16e.
Chapter 3 and Chapter 4 Status Codes (used to
identify the type of Withholding Agent, Recipient,
Intermediary, or Payer).
Chapter 3
03
04

Status Codes
Territory FI treated as U.S. Person
Territory FI – not treated as U.S. Person

05
06
07
08
09
10

U.S. branch – treated as U.S. Person
U.S. branch – not treated as U.S. Person
U.S. branch – ECI presumption applied
Partnership other than Withholding Foreign Partnership
Withholding Foreign Partnership
Trust other than Withholding Foreign Trust

Pooled Reporting Codes9

27
28
29
30
31

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

32

Agency Withholding Rate Pool – Exempt Organization

7

Use only to report a U.S. reportable account or nonconsenting 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 Regulations section 1.1471-4(b)(6).

9

Codes 27 through 32 should only be used by a QI, QSL, WP, or WT. A QI acting as a QDD may use code 27 or 28.

-32-

Appendix B (continued)
Recipient Status Codes (continued) and Box 13j LOB Codes
Chapter 4 Status Codes
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
50

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 – Nonregistering Local
Bank
Certified Deemed-Compliant FFI – Sponsored Entity
Certified Deemed-Compliant FFI – Investment entity that
does not maintain financial accounts
Nonparticipating FFI
Owner-Documented FFI
U.S. Branch – treated as U.S. person
U.S. Branch – not treated as U.S. person (reporting
under section 1471)
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
Excepted Territory NFFE
Excepted NFFE – Other
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
Nonconsenting U.S. account
Sponsored direct reporting NFFE
Excepted Inter-affiliate FFI
Undocumented Preexisting Obligation
U.S. branch – ECI presumption applied
Account Holder of Excluded Financial Account10
Passive NFFE reported by FFI11
NFFE subject to 1472 withholding
U.S. Withholding Agent–Foreign branch of FI

Pooled Reporting Codes
42
43
44
45
46
47
48

Recalcitrant Pool – No U.S. Indicia
Recalcitrant Pool – U.S. Indicia
Recalcitrant Pool – Dormant Account
Recalcitrant Pool – U.S. Persons
Recalcitrant Pool – Passive NFFEs
Nonparticipating FFI Pool
U.S. Payees Pool

49

QI-Recalcitrant Pool-General12

Box 13j.

LOB Code (enter the code that best describes the
applicable limitation on benefits (LOB) category that
qualifies the taxpayer for the requested treaty
benefits).

Code

LOB Treaty Category

02

Government – contracting state/political subdivision/local
authority
Tax exempt pension trust/Pension fund
Tax exempt/Charitable organization
Publicly traded corporation
Subsidiary of publicly traded corporation

03
04
05
06
07
08
09
10
11

Company that meets the ownership and base erosion test
Company that meets the derivative benefits test
Company with an item of income that meets the active
trade or business test
Discretionary determination
Other

10
This code should only be used if income is paid to an account that is excluded from the definition of financial account under Regulations section
1.1471-5(b)(2) or under Annex II of the applicable Model 1 IGA or Model 2 IGA.
11
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 Boxes 15d and 15e.
12
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.

-33-

Appendix C
Comprehensive analysis of Example 1 in Payments directly to beneficial owners.
DIRECT PAYMENT TO BENEFICIAL OWNER

WA, a U.S. corporate withholding agent who is an issuer of stock and not a financial institution, makes a $1,000 payment of U.S. source dividends to
A, a foreign individual who has provided a Form W-8BEN to WA and who is not eligible for a reduced rate of chapter 3 withholding under a treaty.
Before completing Form 1042-S, WA takes the following steps:
Step 1:

Because the payment is a payment described in Amounts Subject to Reporting on Form 1042-S, WA determines it has a Form 1042-S
filing obligation.

Step 2:

Because WA is making a payment of U.S. source FDAP income, WA determines the payment meets the definition of both a
“withholdable payment ” under chapter 4 and “an amount subject to withholding” under chapter 3.

Step 3:

Because the payment is being made to an individual (and not a nonparticipating FFI or an NFFE that is not an excepted NFFE that has
failed to disclose its substantial U.S. owners (or certify that it has no substantial U.S. owners) (see definitions of these terms)), WA
determines that the payment is not subject to chapter 4 withholding. Because the payment is not subject to chapter 4 withholding but is
an amount subject to withholding under chapter 3, WA determines that chapter 3 is the correct chapter indicator. WA will thus enter a "3"
in Box 3 (chapter indicator).

Note. Although the payment is properly classified as a chapter 3 payment, WA must complete certain Boxes on Form 1042-S that pertain to
chapter 4 (see explanations for Boxes 4a, 4b, and 13g below).
WA must file a Form 1042-S for A and complete it as follows.
Caution: Be sure to read the instructions for each box or field in its entirety before completing a box or field on Form 1042-S.
WA must provide a unique form identifier (UFI) in the applicable entry field at the top of Form 1042-S. For additional information, including UFI
requirements, see the instructions for Unique form identifier.
Box

Description

Required Entry

Comments
WA enters “06” (dividends paid by U.S. corporations - general), which is the appropriate
two-digit code from the list of Income Codes provided in Appendix A.

1

Income code

“06”

2

Gross income

“1000”

WA enters the gross amount paid (in whole dollars), including withheld tax.

3

Chapter indicator

“3”

WA enters “3” to indicate that amounts were withheld pursuant to chapter 3.

3a

Chapter 3 exemption
code

“00”

WA enters “00” because an amount was withheld under chapter 3 and the tax rate is greater
than zero and is not due to backup withholding (see the instructions for Boxes 3a and 4a,
earlier).

3b

Chapter 3 tax rate

“30.00”

4a

Chapter 4 exemption
code

“15”

4b

Chapter 4 tax rate

“00.00”

5

Withholding allowance

WA enters “30.00” consistent with the formatting specified in the instructions for Boxes 3b
and 4b, earlier.
WA enters “15” (payee not subject to chapter 4 withholding), which is the appropriate
two-digit code from the list of Exemption Codes provided in these instructions.
Note. WA uses exemption code 15 because the payment is a withholdable payment, but
has not been withheld upon under chapter 4 because of the payee's chapter 4 status (an
individual and not a person subject to chapter 4 withholding as explained in the instructions
for Boxes 3a and 4a, earlier).
WA enters “00.00” because the amount reported in Box 2 is not subject to chapter 4
withholding. See the instructions for Boxes 3b and 4b, earlier.
WA leaves Box 5 blank because the income code it is reporting in Box 1 is not one of the
codes specified in the instructions (see Box 5, earlier) for which Box 5 reporting is required.

6

Net income

7a

Federal Tax Withheld

7b

Check if federal tax
withheld was not
deposited with the IRS
because escrow
procedures were applied

WA does not check the box because it is not using an escrow procedure.

7c

Check if withholding
occurred in subsequent
year with respect to a
partnership interest

WA does not check the box because it did not withhold in a subsequent year.

8

Tax withheld by other
agents

9

Overwithheld tax repaid
to recipient pursuant to
adjustment procedures

10

Total withholding credit

11

Tax paid by withholding
agent (amounts not
withheld)

12a

Withholding agent's EIN

WA leaves Box 6 blank because it did not enter an amount in Box 5.
“300”

WA enters “300” (30% of $1,000).

WA leaves Box 8 blank because tax was not withheld by other withholding agents.
WA leaves Box 9 blank because it did not repay overwithheld tax to the recipient under the
reimbursement procedure or the set-off procedure. For more information, see the
instructions for Box 9, earlier.
“300”

WA enters “300” (combining Boxes 7a, 8, and 9)
WA leaves Box 11 blank because it withheld on the payment to the recipient (as opposed to
paying the tax from its own funds). For more information, see the instructions for Box 11,
earlier.

Specific
information
required

Although WA's EIN is not specified in this example, this is a required field that WA would
complete.

-34-

Appendix C (continued)
Box

Description

Required Entry

Comments
WA enters “15” in Box 12b and “02” in Box 12c because it is a U.S. corporate withholding
agent that is not a financial institution.
Note. WA must enter both a chapter 3 and a chapter 4 withholding agent status code
regardless of the type of payment being reported.

12b–c

Withholding agent's
chapter 3 and chapter 4
status code

“15” and “02”

12d

Withholding agent's
name

“WA”

12e

Withholding agent's
GIIN

WA leaves this box blank because a U.S. withholding agent is generally not required to
obtain a GIIN. See Global intermediary identification number and Box 12e, earlier, for details.

12f

Withholding agent's
country code

WA leaves Box 12f blank because it is a U.S. withholding agent (see the instructions for Box
12f, earlier).

12g

Withholding agent's
foreign tax identification
number, if any

12h–I

Withholding agent's
address

Specific
information
required

13a

Recipient's name

“A”

13b

Recipient's country
code

Specific
information
required

Although the recipient's country of residency is not specified in this example, this is a
required field that WA would complete. See the instructions for Box 13b, earlier, for
requirements.

Recipient's address

Specific
information
required

Although the recipient's address is not specified in this example, this is a required field that
WA would complete. See Boxes 13c and 13d for requirements.

13c–d

13e

13f

WA leaves this box blank because it is a U.S. withholding agent and it does not have an
FTIN or a country of residence other than the United States.
Although WA's address is not specified in this example, this is a required field that WA
would complete. See Boxes 12d Through 12i, earlier, for requirements.
WA enters the recipient's name.

The recipient's U.S. TIN is not specified in this example. However, given the facts used in
this example, the recipient's U.S. TIN is generally not required because A is not a type of
recipient described in the instructions for Boxes 13e and 13h, earlier, for which this TIN is
required (for example, A is not claiming a reduced rate of, or exemption from, tax under a tax
treaty between the recipient's country of residence and the United States). However, WA
must enter the recipient's U.S. TIN if WA knows it or if it was provided to WA on a Form W-8.

Recipient's U.S. TIN, if
any
Recipient's chapter 3
status code

WA must enter its complete name.

“16”

WA enters chapter 3 status code “16” (individual), which is the appropriate two-digit code
from the list of chapter 3 status codes provided in Appendix B.
Note. A withholding agent must enter a chapter 3 status code for all “amounts subject to
reporting under chapter 3.”

“23”

WA enters chapter 4 status code “23” (individual), which is the appropriate two-digit code
from the list of chapter 4 status codes provided in Appendix B.
Note. A withholding agent must enter a chapter 4 status code for the recipient only if the
payment is a withholdable payment (as is the case in this example) or when a participating
FFI or registered deemed-compliant FFI is reporting a chapter 4 withholding rate pool of U.S.
payees.

13g

Recipient's chapter 4
status code

13h

Recipient's GIIN

WA leaves Box 13h blank because it only applies for chapter 4 reporting purposes. See
Global intermediary identification number and the instructions for Boxes 13e and 13h.

13i

Recipient's foreign tax
identification number, if
any

The recipient's FTIN is not required because A is not a type of recipient described in the
instructions for Box 13i for which the FTIN is required.

13j

LOB code

13k

Recipient's account
number

WA leaves Box 13j blank because the recipient is an individual (not an entity).
WA leaves Box 13k blank because WA is not a financial institution.

13l

Recipient's date of birth

WA leaves Box 13l blank because WA is not a financial institution.

14a–b

Primary withholding
agent's information

15a–I

Intermediary information

WA leaves these boxes blank because WA is making a direct payment to the recipient and
there are no other withholding agents.

16a–e

Payer's information

WA leaves these boxes blank because WA is making a direct payment to the recipient and
there are no other payers involved.

17a–c

State income taxes

Although not specified in this example, WA enters in these boxes any information relating to
any state income tax withheld.

WA leaves these boxes blank because tax was not withheld by other withholding agents.

-35-

Appendix D
Comprehensive example of how to complete Form 1042-S for gambling winnings.
DIRECT PAYMENT TO BENEFICIAL OWNER
ABC Casino ("WA"), a U.S. corporate withholding agent that is not a financial institution, makes a $10,000 payment of gambling winnings to A, a
foreign individual who has provided a Form W-8BEN to WA establishing foreign status. The gambling winnings are subject to 30% withholding as
there is no exemption available under the Code or applicable treaty. Before completing Form 1042-S, WA takes the following steps:
Step 1: Because the payment is a payment described in Amounts Subject to Reporting on Form 1042-S, WA determines it has a Form 1042-S filing
obligation.
Step 2: Because WA is making a payment of U.S. source FDAP income, WA determines the payment meets the definition of “an amount subject to
withholding” under chapter 3. Because gambling winnings are not treated as a “withholdable payment” under chapter 4 as it is an excluded
nonfinancial payment under Regulations section 1.1473-1(a)(4)(iii), WA determines that the payment is not subject to chapter 4 withholding.
Step 3: Because the payment is not subject to chapter 4 withholding but is an amount subject to withholding under chapter 3, WA determines that
chapter 3 is the correct chapter indicator. WA will thus enter a "3" in Box 3 (chapter indicator).
Note. Although the payment is properly classified as a chapter 3 payment, WA must complete certain boxes on Form 1042-S that pertain to
chapter 4 (see explanations for Boxes 4a, 4b, and 13g below).
WA must file a Form 1042-S for A, and complete it as follows.
Caution: Be sure to read the instructions for each box or field in its entirety before completing a box or field on Form 1042-S.
WA must provide a unique form identifier (UFI) in the applicable entry field at the top of Form 1042-S. For additional information, including UFI
requirements, see the instructions for Unique form identifier.
Box

Description

Required Entry

Comments
WA enters “28” (Gambling winnings), which is the
appropriate two-digit code from the list of income
codes provided in Appendix A.

1

Income code

“28”

2

Gross income

“10,000”

WA enters the gross amount paid (in whole dollars),
including withheld tax.

3

Chapter indicator

“3”

WA enters “3” to indicate that amounts were withheld
pursuant to chapter 3.

“00”

WA enters “00” because an amount was withheld
under chapter 3 and the tax rate is greater than zero
and is not due to backup withholding (see the
instructions for Boxes 3a and 4a, earlier).

3a
3b
4a
4b

Chapter 3 exemption code
Chapter 3 tax rate
Chapter 4 exemption code
Chapter 4 tax rate

5

Withholding allowance

6

Net income

“30.00”

WA enters “30.00” consistent with the formatting
specified in the instructions for Boxes 3b and 4b,
earlier.

“16”

WA enters “16” (excluded nonfinancial payment),
which is the appropriate two-digit code from the list of
Exemption Codes provided in Appendix B.

“00.00”

WA enters “00.00” because the amount reported in
Box 2 is not subject to chapter 4 withholding. See the
instructions for Boxes 3b and 4b.
WA leaves Box 5 blank because the income code it is
reporting in Box 1 is not one of the codes specified in
the instructions (see Box 5, earlier) for which box 5
reporting is required.
WA leaves Box 6 blank because it did not enter an
amount in Box 5.

7a

Federal Tax Withheld

7b

Check if federal tax withheld was not
deposited with the IRS because escrow
procedures were applied

WA does not check the box because it is not using the
escrow procedure.

7c

Check if withholding occurred in
subsequent year with respect to a
partnership interest

WA does not check the box because it did not withhold
in a subsequent year.

8

Tax withheld by other agents

9

Overwithheld tax repaid to recipient
pursuant to adjustment procedures

10

Total withholding credit

11

Tax paid by withholding agent (amounts
not withheld)

12a

Withholding agent's EIN

12b–c

Withholding agent's chapter 3 and
chapter 4 status code

“3,000”

WA enters “3,000” (30% of $10,000).

WA leaves Box 8 blank because tax was not withheld
by other withholding agents.
WA leaves Box 9 blank because it did not repay
overwithheld tax to the recipient under the
reimbursement procedure or the set-off procedure. For
more information, see the instructions for Box 9.
“3,000”

WA enters “3,000” (combining Boxes 7a, 8, and 9)
WA leaves Box 11 blank because it withheld on the
payment to the recipient (as opposed to paying the tax
from its own funds). For more information, see the
instructions for Box 11, tax paid by withholding agent
(amounts not withheld).

Although WA's EIN is not specified in this example, this
Specific information required is a required field that WA would complete.

“15” and “02”

-36-

WA enters “15” in Box 12b and “02” in Box 12c
because it is a U.S. corporate withholding agent that is
not a financial institution.
Note. WA must enter both a chapter 3 and a chapter 4
withholding agent status code regardless of the type of
payment being reported.

Appendix D (continued)
Box

Description

Required Entry

12d

Withholding agent's name

“ABC Casino”

12e

Withholding agent's GIIN

WA leaves this box blank because a U.S. withholding agent is generally not required to
obtain a GIIN. See Global intermediary identification number and Box 12e for details.

12f

Withholding agent's
country code

WA leaves Box 12f blank because it is a U.S. withholding agent. See the instructions for
Box 12f, earlier.

12g

Withholding agent's
foreign tax identification
number, if any

WA leaves this box blank because it is a U.S. withholding agent and it does not have an
FTIN or a country of residence other than the United States.

12h–I

Withholding agent's
address

13a

Recipient's name

“A”

Recipient's country code

Specific
information
required

Although the recipient's country of residency is not specified in this example, this is a
required field that WA would complete. See the instructions for Box 13b for requirements.

Recipient's address

Specific
information
required

Although the recipient's address is not specified in this example, this is a required field
that WA would complete. See Boxes 13c and 13d for requirements.

13b
13c–d

13e

13f

Specific
information
required

Comments
WA must enter its complete name.

Although WA's address is not specified in this example, this is a required field that WA
would complete. See Boxes 12d Through 12i for requirements.
WA enters the recipient's name.

Recipient's U.S. TIN, if
any

The recipient's U.S. TIN is not specified in this example. However, given the facts used in
this example, the recipient's U.S. TIN is generally not required because A is not a type of
recipient described in the instructions for Boxes 13e and 13h for which this TIN is
required (for example, A is not claiming a reduced rate of, or exemption from, tax under a
tax treaty between the recipient's country of residence and the United States). However,
WA must enter the recipient's U.S. TIN if WA knows it or if it was provided to WA on a
Form W-8.

Recipient's chapter 3
status code

WA enters chapter 3 status code “16” (individual), which is the appropriate two-digit code
from the list of chapter 3 status codes provided in Appendix B.
Note. A withholding agent must enter a chapter 3 status code for all “amounts subject to
reporting under chapter 3.”

“16”

13g

Recipient's chapter 4
status code

WA is not required to provide the chapter 4 status code of the recipient given that the
payment being reported is not a withholdable payment.
Note. A withholding agent must enter a chapter 4 status code for the recipient only if the
payment is a withholdable payment or when a participating FFI or registered
deemed-compliant FFI is reporting a chapter 4 withholding rate pool of U.S. payees.

13h

Recipient's GIIN

WA leaves Box 13h blank because it only applies for chapter 4 reporting purposes. See
Global intermediary identification number and the instructions for Boxes 13e and 13h.

13i

Recipient's foreign tax
identification number, if
any

The recipient's FTIN is not required because A is not a type of recipient described in the
instructions for Box 13i for which the FTIN is required.

13j

LOB code

13k

Recipient's account
number

WA leaves Box 13j blank because the recipient is an individual (not an entity).
WA leaves Box 13k blank because WA is not a financial institution.

13l

Recipient's date of birth

WA leaves Box 13l blank because WA is not a financial institution.

14a–b

Primary withholding
agent's information

15a–I

Intermediary information

WA leaves these boxes blank because WA is making a direct payment to the recipient
and there are no other withholding agents.

16a–e

Payer's information

WA leaves these boxes blank because WA is making a direct payment to the recipient
and there are no other payers involved.

17a–c

State income taxes

Although not specified in this example, WA enters in these boxes any information relating
to any state income tax withheld.

WA leaves these boxes blank because tax was not withheld by other withholding agents.

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