Skip to main content

Solutions

Products

Recommended products

Questions? We are here to help.
Contact us

Purchase

Questions? We are here to help.

Resources

1042-S

Processing and filing 1042-S returns

ONESOURCE Trust Tax allows you to prepare original and (if necessary) corrected 1042-S forms and data files for filing electronically through the IRS' Filing Information Returns Electronically (FIRE) system. All 1042-S data files are created in the proper IRS filing format for you to file through the IRS' FIRE system. ONESOURCE Trust Tax does not file 1042-S data files for you.
Form 1042-S captures data for many types of income recipients and many types of income. With respect to ONESOURCE Trust Tax, Form 1042-S processing applies to portfolio and non-portfolio income paid to or on behalf of nonresident alien (NRA) recipients regardless of whether the income is taxable under U.S. law or a tax treaty.
A NRA recipient is a recipient who is not a citizen or resident of the United States. The tax status of a NRA recipient is determined based on the documentation (for example, Form W-8BEN) provided by the recipient. If the documentation is not provided, U.S. withholding on income is required at the 30% tax rate regardless of whether a reduced withholding rate or modified withholding rules apply under a tax treaty.
NRA recipients and income types are identified on Form 1042-S using recipient codes and income codes. If an exemption from withholding is allowed, it is identified by an exemption code. A separate Form 1042-S is required for each income type that is subject to reporting.
Form 1042-S must be filed with the IRS before March 16 of the calendar year following the year in which the amount was paid. Recipient copies are due before March 16 of the calendar year following the year in which the amount was paid.
ONESOURCE Trust Tax does not support the following IRS forms:
  • Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons
  • Form 1042-T, Annual Summary and Transmittal of Forms 1042-S
  • Form 8809, Application for Extension of Time to File Information Returns when it is used to request an extension of time to file Form 1042-S.
note
To help you complete Forms 1042 and 1042-T, transactions posted to tax code 342 (Federal Income Tax Withheld for NRA) are totaled for each NRA recipient. The totals are included in the
Tax Paid YTD
 column of the
NRA Summary
 register when a 1042-S projection or tax return is processed.

Tasks

Complete the following to prepare, review and process original and corrected 1042-S forms and data files for electronically filing through the IRS' FIRE system:
  1. Granting User Rights. Includes granting user rights for modifying 1042-S control information and filiing 1042-S forms.
  2. Setting 1042-S Controls. Includes setting withholding agent, transmitter and NQI information as well as print and copy options.
  3. Setting Options. Includes setting the options and overrides that apply to Form 1042-S and to distributions to recipients.
  4. Reviewing Recipient Information. Includes reviewing recipient details, reviewing recipient income, and indicating NQI information is required for an account and overriding NQI information.
  5. Coding Assets as Non-portfolio assets.
  6. Factoring assets that are subject to reporting on Form 1042-S.
  7. Processing 1042-S Projections and Tax Returns. Includes processing 1042-S projections during the year, processing 1042-S tax returns at the end of the year, processing accounts with domestic and NRA recipients, and reviewing processing results at the register and account levels.
  8. Processing a Revised Form 1042-S. Includes the steps to take to amend and re-issue a Form 1042-S that was sent to a recipient but has not yet been filed with the IRS.
  9. Filing Forms 1042-S. Includes submitting the request to prepare a 1042-S data file and downloading an original 1042-S data file for filing through the IRS' FIRE system.
  10. Processing and Filing Corrected 1042-S Returns. Includes correcting the 1042-S information that was filed with the IRS, and preparing and downloading corrected 1042-S data files for filing through the IRS' FIRE system.

This article applies to:

  • PRODUCT: ONESOURCE Trust Tax