Form Schedule Q (Form 1 Schedule Q (Form 1 Tax Liability of Qualified Derivatives Dealer (QDD)

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TREASURY/IRS AND OMB USE ONLY DRAFT
SCHEDULE Q
(Form 1042)

OMB No. 1545-0096

Tax Liability of Qualified Derivatives Dealer (QDD)

2025

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

Department of the Treasury
Internal Revenue Service
Name of taxpayer

Employer identification number

Name of QDD

QI-EIN

QDD Tax 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

DRAFT — DO NOT FILE

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. 2022-43, 2022-52 I.R.B. 570.
QDD Partnerships. If a partnership is, or has a branch that is, a QDD (a
“QDD Partnership”), then it must complete Schedule(s) Q.

General Instructions
A separate Schedule Q is required for each QDD. In addition, if a
taxpayer has a fiscal year rather than a calendar year, the taxpayer must
provide a separate Schedule Q for each QDD for each portion of the
fiscal year that falls within the calendar year.
Example. A QDD with a fiscal year beginning September 1 and ending
August 31 would complete two schedules (one for the period of
September 1, 2025, through December 31, 2025, and one for the period
of January 1, 2026, through August 31, 2026).

Specific Instructions
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, earlier).
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.
Partnerships. A QDD Partnership must complete Schedule(s) Q taking
into account the partnership-specific adjustments specified in section
3.09 of the QIA.
For Paperwork Reduction Act Notice, see the Instructions for Form 1042.

(b)
Withholding
Tax Rate

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

1
2
3
4

5a
5b
5c
5d
6

Column (b), Withholding Tax Rate. In the case of a QDD Partnership,
this column should be completed reflecting the weighted average
applicable withholding tax rate of the partners. The weighted average
applicable withholding tax rate of the partners is determined by adding
the product of each partner’s percentage of the allocations of the
applicable item by that partner’s applicable withholding tax rate. The
withholding tax rate of a U.S. partner is zero, unless it is a partnership
with direct or indirect foreign partners.
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. In the case of a QDD Partnership, this
column should reflect the total tax liability of the partners.
Note: For calendar years 2018 through 2026, certain information is not
required, as indicated in the line instructions below. However, if the
taxpayer has a fiscal year rather than a calendar year that begins in
2026 and ends in 2027, information is required for any amounts paid or
accrued on or after January 1, 2027.
Line 1. 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 2026, this information is not
required.
Line 2. For calendar years 2019 through 2026, only the gross amount
(column (a)) and tax rate (column (b)) are required.
Line 3. Column (c) is the sum of each section 3.09(A) amount for the
QDD for the relevant period.
Note: For calendar years 2019 through 2026, this information is not
required.
Line 4. Enter the information requested in columns (a), (b), and (c).
Line 5. 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 2026, do not include dividends
included on line 2.
Cat. No. 71805T

Schedule Q (Form 1042) 2025 Created 6/5/25

DRAFT — DO NOT FILE

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 . . . . . . . . . . . . . .

of

.
(a)
Gross Amount

Summary of QDD Tax Liability
1
2
3

Schedule