2026 Form 1042-S Tax Forms

A U.S. payer (like an employer, bank, or company) uses Form 1042‑S to report income paid to foreign persons (non‑U.S. individuals or entities) that is subject to U.S. withholding tax.

Yes, Form 1042-S is updated annually; if you're filing Form 1042-S, it’s best to use the version for that specific tax year, along with that year’s instructions.

Form 1042-S reports U.S. source income paid to foreign persons (nonresident individuals or foreign entities) that may be subject to U.S. withholding tax. Main categories of income reported include interest, dividends, passive FDAP (Fixed, Determinable, Annual, or Periodical) income including royalties and rents.

Yes. Form 1042-S can be electronically filed using efile4Biz.com, and in many cases, electronic filing is required.

Yes, each recipient gets their own Form 1042‑S. In some cases it is possible that you must issue multiple 1042‑S forms to the same recipient. For instance, if any of these differ: Income type (income code), tax rate applied, exemption code or withholding status, or Chapter 3 vs. Chapter 4 (FATCA) reporting differences.

Form 1042‑S must be filed by anyone who acts as a “withholding agent” for payments to foreign persons. A withholding agent is any person or organization (U.S. or foreign) that controls, receives, or pays U.S. source income to a foreign person and is responsible for withholding tax. This includes businesses & financial institutions, employers & payers, educational & nonprofit institutions and individuals who make reportable payments to foreign persons (less common but possible).

The default (statutory) U.S. withholding rate reported on Form 1042‑S is 30%. This applies to most types of U.S. source FDAP income (Fixed, Determinable, Annual, or Periodical income) paid to foreign persons. The 30% rate is often reduced or even eliminated depending on specific circumstances. The most common reduction comes from U.S. tax treaties with other countries. Other sources of reduction include exemptions under U.S. tax law. Some income types are exempt regardless of treaties, such as portfolio interest (often 0%), certain bank deposit interest, and some scholarships or grants (partially or fully exempt).

A withholding agent that is not a financial institution is required to file Forms 1042-S electronically if it files 10 or more total information returns in a calendar year (combined across all types), including Forms 1042‑S, Forms 1098, 1099, Forms W‑2, etc. Certain filers must e‑file no matter how many forms they have, including financial institutions reporting Chapter 3 or Chapter 4 (FATCA) payments, and partnerships with more than 100 partners.

Form 1042-S must be filed with the IRS and copies sent to foreign recipients by March 15 of the year following the calendar year in which the income was paid. However, when the due date falls on a weekend or legal holiday, the form due date is moved to the next business day.

Form 1042-S reports payments and amounts withheld under FATCA (Foreign Account Tax Compliance Act), also known as Chapter 4 of the Internal Revenue Code, in addition to those amounts required to be reported under Chapter 3. Form 1042‑S includes Chapter 4 status codes that identify whether the recipient is a participating FFI, a non‑participating FFI, an active or passive NFFE, and whether they are FATCA compliant or not. These codes are critical for determining whether withholding applies, what rate is used and whether compliance requirements were met. Tax professionals managing multinational clients must ensure compliance with both chapters when completing the form.