1042 Schedule Q Tax Liability of Qualified Derivatives Dealer (QDD)

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SCHEDULE Q
(Form 1042)

OMB No. 1545-0096

Tax Liability of Qualified Derivatives Dealer (QDD)

Department of the Treasury
Internal Revenue Service

▶

2021

▶ Attach to Form 1042.
Go to www.irs.gov/Form1042 for the latest information.

Employer identification number

Name of taxpayer

DRAFT AS OF
September 23, 2021
DO NOT FILE
QI-EIN

Name of QDD

QDD Taxable Year (enter month, day, and year for beginning and ending dates)
Beginning

, 20

, and ending

, 20

.

Indicate the year or portion of the year to which the schedule relates (enter month, day, and year beginning
and ending dates)
Beginning

, 20

, and ending

, 20

Total section 871(m) amount . . . . . . . . . . . .
Total dividends received in equity derivatives dealer capacity . .
Total QDD tax liability pursuant to section 3.09(A) of the Qualified
Intermediary Agreement . . . . . . . . . . . . . .
4
Total QDD tax liability pursuant to section 3.09(B) of the Qualified
Intermediary Agreement . . . . . . . . . . . . . .
5
Total QDD tax liability pursuant to section 3.09(C) of the Qualified
Intermediary Agreement:
a Income Type ▶
b Income Type ▶
c Income Type ▶
d Income Type ▶
6
Total of line 5 amounts . . . . . . . . . . . . . .

Who Must File
If the taxpayer or any branch of the taxpayer was a qualified
derivatives dealer (QDD) (defined below) during the tax year,
Schedule Q must be completed and filed for each of those QDDs.
The taxpayer must file Schedule Q as an attachment to Form 1042
even if the QDD has zero tax liability.
Qualified derivatives dealer (QDD). A QDD is a home office or
branch that, in accordance with the qualified intermediary
agreement (QIA) (defined below), qualifies and has been approved
for QDD status and satisfies the requirements of the QIA. See the
QIA for additional information.
Qualified intermediary agreement (QIA). The QIA is section 6 of
Rev. Proc. 2017-15.

General Instructions

of

.

(a)
Gross Amount

Summary of QDD Tax Liability

1
2
3

Schedule

(b)
Withholding
Tax Rate

(c)
Amount of
Tax Liability (column
(a) x column (b))

1
2

3

4

5a
5b
5c
5d
6

Note: For calendar years 2018 through 2022, certain information is
not required, as indicated in the line instructions below. However, if
the taxpayer has a tax year that begins in 2022 other than the
calendar year, information is required for any amounts paid or
accrued on or after January 1, 2023.
Line 1, total section 871(m) amount. The gross amount to be
entered in column (a) is the sum of each section 871(m) amount for
the QDD for the relevant period. See section 2.73 of the QIA for the
definition of section 871(m) amount.
Note: For calendar years 2019 through 2022, this information is not
required.
Line 2, total dividends received in equity derivatives dealer
capacity.
Note: For calendar years 2019 through 2022, only the gross amount
(column (a)) and tax rate (column (b)) are required.

A separate Schedule Q is required for each QDD. In addition, if a
taxpayer has a tax year other than the calendar year, the taxpayer
must provide separate Schedules Q for each QDD for the portion of
the calendar year in the first tax year and the portion in the second
tax year.

Line 3, total QDD tax liability pursuant to section 3.09(A) of the
Qualified Intermediary Agreement. Column (c) is the sum of each
section 3.09(A) amount for the QDD for the relevant period.

Specific Instructions

Line 4, total QDD tax liability pursuant to section 3.09(B) of the
Qualified Intermediary Agreement. Enter the information
requested in columns (a), (b), and (c).

Name of QDD. The name of the QDD should follow the naming
protocol used for applying to be a QDD.
Number of schedules filed. A QDD may be required to file multiple
Schedules Q, for example, if it has multiple branches that are QDDs
or if it is a fiscal year taxpayer (as explained in General Instructions
above). Indicate the number of each Schedule Q filed, as well as the
total number of Schedules Q being filed by the taxpayer in the entry
spaces provided.
Column (c), Amount of Tax Liability. Except as provided in the
Note immediately below, the amount in column (c) is determined by
multiplying column (a) by column (b). This column is not reduced by
any withholding that has occurred.
For Paperwork Reduction Act Notice, see the Instructions for Form 1042.

Note: For calendar years 2019 through 2022, this information is not
required.

Line 5, total QDD tax liability pursuant to section 3.09(C) of the
Qualified Intermediary Agreement. In addition to specifying the
type of income (for example, dividends or interest), enter the
information requested in columns (a), (b), and (c) separately for each
income type. For dividends, include all dividends, including
dividends separately stated on line 2.
Note: For calendar years 2019 through 2022, do not include
dividends included in line 2.

Cat. No. 71805T

Schedule Q (Form 1042) 2021