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  • Product: ONESOURCE Trust Tax

Processing 1042-S Projections and Tax Returns

You can request to process 1042-S projections and tax returns from a register or the account binder. Processing from a register allows you to select one, some or all of the accounts in the register to process.
The following table describes 1042-S projection and tax return processing:
Processing Request
Submit the Request
Description
Projection
Anytime during the year
A 1042-S projection approximates an account's tax data, and can be used to determine the amount of tax that should be paid for a given income type and NRA recipient. The data calculated from a 1042-S projection request is not included in the 1042-S data file that is created for you to file through the IRS' FIRE system.
1042-S projections can be processed at any time during the year by selecting
Tax Return Projection
 or
Tax Return Projection and Worksheet
 from the
Request
 drop-down list on the Process page or pop-up window. When requesting a projection, you can indicate whether you want to include tax data from the beginning of the year to the date of your request (referred to as a year-to-date request), or for a specific date range within the tax year.
After processing completes, you can view the results from the account binder or from a register. In the account binder, a 1042-S projection print file for each account included in the processing request is created and stored on the Documents page. To access a 1042-S projection print file, open the tax year category then open the
Document: Tax Return Projection
 category.
1042-S data from a previous processing request is overridden each time a 1042-S projection processing request is submitted within a given tax year.
Tax Return
At the end of the year
When a 1042-S tax return is processed at the end of the year, the full year's information is included on the Form 1042-S. To process 1042-S tax returns, select
Tax Return
 from the
Request
 drop-down list on the Process page or pop-up window.
After processing completes, you can view the results from the account binder or from a register. In the account binder, a 1042-S tax return print file for each account included in the processing request is created and stored on the Documents page. To access a 1042-S tax return print file, open the tax year category then open the
Document: Tax Return
 category.
Data reported on Form 1042-S is overridden each time a 1042-S tax return processing request is submitted within a given tax year.
Form 1042-S Copies B, C and D are available for Mail Service.
Beginning in tax year 2022, a separate Form 1042-S is generated for NRA recipients who receive income from publicly traded partnerships (PTPs). For example, if a recipient receives income of $100 from PTP ABC and $200 from PTP XYZ, then two separate 1042-S forms will be generated: one reporting $100 (income code 27) and another reporting $200 (income code 27). In years prior to tax year 2022, only one Form 1042-S would have been generated and the form would have reported $300 (income code 27).

Processing from a Register

To submit a 1042-S projection or tax return processing request from a register:
  1. From the Register Listing page, select Run for the register that includes the accounts you want to process.
  2. Select the check box in the first column for each account you want to process. If you want to select all of the accounts in the register, do not select any check boxes.
  3. The following graphic shows account 1042STEST is selected for processing:
  4. Select the
    Process
     subtopic. The Process page displays.
  5. Complete the following to process 1042-S projections:
    1. Select
      Tax Return Projection
       from the
      Request
       drop-down list.
    2. Select
      Federal and State
      ,
      Federal Only
       or
      State Only
       from the
      Document Option
       drop-down list.
    3. Under the
      Projection Options
       collapsible section, select
      Year to Date
       to include data from the beginning of the tax year to today's date. Select
      Partial Year
       to include the data for the date range you enter in the
      beginning
       and
      ending
       fields.
  7. Complete the following to process 1042-S tax returns:
    1. Select
      Tax Return
       from the
      Request
       drop-down list.
    2. Select
      Federal and State
      ,
      Federal Only
       or
      State Only
       from the
      Document Option
       drop-down list.
  9. Select
    Process
    . After processing completes, you can review the processing results from a register.
  10. You can make changes and reprocess accounts as many times as you like throughout the year. However, after the request to prepare the 1042-S data file is submitted, you must begin the 1042-S corrections process.

Processing from an Account Binder

To submit a 1042-S projection or tax return processing request from the account binder:
  1. Open the account.
  2. Select
    Process
     from the
    Account Action
     drop-down list.
  3. Complete the following to process a 1042-S projection:
    1. Select
      Tax Return Projection
       from the
      Request
       drop-down list.
    2. Select
      Federal and state
      ,
      Federal Only
       or
      State Only
       from the
      Document Option
       drop-down list.
    3. Under the
      Projection Options
       collapsible section, select
      Year to Date
       to include data from the beginning of the tax year to today's date, or select
      Partial Year
       to include the data for the date range you enter in the
      beginning
       and
      ending
       fields.
  5. Complete the following to process a 1042-S tax return:
    1. Select
      Tax Return
       from the
      Request
       drop-down list.
    2. Select
      Federal and state
      ,
      Federal Only
       or
      State Only
       from the
      Document Option
       drop-down list.
  7. Select
    Process
    . After processing completes, you can review the processing results from the account binder.
  8. You can make changes and reprocess accounts as many times as you like throughout the year. However, after the request to prepare the 1042-S data file is submitted, you must begin the 1042-S corrections process.

Processing Accounts that List Domestic and NRA Recipients when the Income Reallocation Service is Used to Factor Assets

If you use the Income Reallocation Service to factor assets and you have accounts that list domestic and NRA recipients, you will need to complete the following:
  1. Use the Admin Controls page to set the
    Factoring Option
     drop-down list to
    Use IR Factors
    .
  2. Use the Process page or pop-up window to submit a processing request to generate 1041 or 1099 returns.
  3. Use the Admin Controls page to set the
    Factoring Option
     drop-down list to
    Use NRA Factors
    .
  4. Use the Process page or pop-up window to submit a processing request to generate Form 1042-S.

Reviewing Processing Results

After processing completes, you can review the processing results from a register or from the account binder. You can make changes and reprocess accounts as many times as you like throughout the year. After the request to prepare the 1042-S data file is submitted, you must begin the 1042-S corrections process.
Using Registers to Review Processing Results
The registers listed below are automatically updated by 1042-S projection and tax return processing requests. You can change the information in the
Withholding Agent Listing
,
NRA Recipient Listing
 and
NRA Detail
 registers until the request to prepare the 1042-S data file is submitted.
  • Withholding Agent Listing
    -Includes all withholding agents (even those where the account name or EIN is used) for the PAN. The information in this register is verified in the same manner as the 1042-S data file. Any errors in the information are displayed in the
    WA Diagnostic
     column.
  • A withholding agent that has one of the following errors at the time the 1042-S data file is prepared is excluded from the 1042-S data file along with the related recipients:
    • SSN/EIN is not correctly formatted
    • Recipient name required (Recipient means withholding agent)
    • Recipient address required (Recipient means withholding agent)
    • Recipient city required (Recipient means withholding agent)
    • Recipient state required (Recipient means withholding agent. The state is required only if the address is a U.S. address.)
    • Province code required for Canada
    • TIN must begin with 98 for QI-EIN
    • Withholding agent contact information required
  • Beginning in tax year 2020, the following Chapter 3 status codes are inactive:
    • 01 (U.S. Withholding Agent-FI)
    • 02 (U.S. Withholding Agent-Other)
    • 34 (U.S. Withholding Agent-Froeign branch of FI)
  • An inactive Chapter 3 status code creates diagnostic errors in the
    Withholding Agent Listing
     register and in the
    1042-S Error Summary
     collapsible section on the Prepare 1042-S page. The error prevents the withholding agent and any records reported for the withholding agent from being included in the file to be exported and submitted to the IRS. To update the Chapter 3 status code, access the 1042-S Control Information page by selecting
    SETUP
     then
    1042-S Control
    .
  • If you change and save the PAN-level withholding agent information from this register, then the changes are saved in this register and under the
    Withholding Agent Detail
     collapsible section on the 1042-S Control Information page. If you change and save the information for a withholding agent that is an account, the changes are saved only in this register. The account is not updated.
  • NRA Recipient Listing
    -Includes all NRA recipients for the PAN, and lists the recipient's EIN, name and address. The information in this register is verified in the same manner as the 1042-S data file. Any errors in the information are displayed in the
    Recipient Diagnostic
     column.
  • A NRA recipient that has one of the following errors at the time the 1042-S data file is prepared is excluded from the 1042-S data file along with the related income:
    • SSN/EIN is not correctly formatted
    • Recipient name required
    • Recipient address required (Refers to the street address, and does not apply if the recipient code is Unknown)
    • Recipient city required
    • Recipient state required (The state is required only if the address is a U.S. address)
    • Recipient country required
    • Province code required for Canada
    • APO/FPO Zip/state code mismatch (Refers to one of the following: the state code is AE and the zip code is not 090xx-0989x; the state code is AA and the zip code is not 340xx; or, the state code is AP and the zip code is not 962xx-966xx)
    • Country code cannot be UC (Does not apply if the recipient code is Unknown)
    • TIN must begin with 98 for QI-EIN
    • Name must be Unknown with blank address
  • Changes made and saved in this register are used only in the 1042-S data file. The source data is not updated. If you process a 1042-S projection or tax return after the information in this register is changed, the source data overrides the changes.
  • NRA Detail
    -Includes the calculated details for each recipient's Form 1042-S. The information in this register is updated only when 1042-S tax returns are processed.
  • The information in this register is verified in the same manner as the 1042-S data file. Any errors in the information are displayed in the
    1042-S Diagnostic
     column.
  • A 1042-S entry that has a severe diagnostic at the time the 1042-S data file is prepared is excluded from the 1042-S data file. Severe diagnostic messages have a
    s-
     preceding the message. Informational diagnostic messages have an
    i-
     preceding the message.
  • Changes made and saved in this register are used only in the 1042-S data file. The source data is not updated. If you process a 1042-S tax return after the information in this register is changed, the source data overrides the changes.
  • You can exclude 1042-S information from the 1042-S data file by selecting
    Yes
     from the
    Excl 1042-S
     column.
  • The
    1042-S Date Filed
     field displays the date the 1042-S data file was created by ONESOURCE Trust Tax.
  • NRA Corrected Detail
    -Includes the current records for each NRA recipient. The current records could be the 1042-S information that is ready to file with the IRS, the original 1042-S filing information or the corrected 1042-S filing information.
  • The information included in the
    NRA Detail
     register applies to this register. The difference between this register and the
    NRA Detail
     register is that the
    NRA Detail
     register shows all records (original and corrected) while this register shows only the current records.
  • NRA Summary
    -Summarizes each recipient's Form 1042-S information. The information in this register cannot be changed.
  • The
    Tax Withheld
     column includes the calculated withholdings. The
    Tax Withheld
     and
    Tax Paid YTD
     columns can be compared to determine whether additional tax should be paid based on the data that exists in the database. When 1042-S projections or tax returns are processed, ONESOURCE Trust Tax totals transactions posted to tax code 342 (Federal Income Tax Withheld for NRA) and includes it in the
    Tax Paid YTD
     column. These totals can be used to help you complete Forms 1042 and 1042-T, which ONESOURCE Trust Tax does not support.
Using the Account Binder to Review Processing Results
The computed 1042-S details for each NRA recipient are added to the account binder when 1042-S projections or tax returns are processed. You can access the 1042-S details using the
Recipient Summary
 collapsible section on the Form 1042-S NQI and Filing Information page.
To use the account binder to review processing results:
  1. Open the account.
  2. Select the
    Recipients
     main topic then the
    Form 1042-S NQI and Filing Information
     subtopic.
  3. Under the
    Recipient Summary
     collapsible section, select the recipient's
    Taxpayer ID
     link.
  4. The Form 1042-S Filing Detail page displays if there are no errors with the recipient's income information. If there are errors, a message similar to the following displays. The information displayed in this message is the same as the diagnostic messages displayed in the
    NRA Detail
     or
    NRA Corrected Detail
     register.
  5. The Form 1042-S Filing Detail page includes all of the computed 1042-S information for the NRA recipient as it will be in the 1042-S data file. The changes you make to the information on this page are included in an original 1042-S data file as long as the recipient was not included in a previously created 1042-S data file for the tax year. Changes made on this page do not update the source data. If a 1042-S tax return is processed, the source data will override the changes made on this page when the changes are made prior to preparing an original 1042-S data file.
  6. If the recipient was included in a previously created 1042-S data file for the tax year, then the recipient is in corrections mode. Changing the information on this page while in corrections mode turns the background of the changed field to yellow, and results in the creation of corrections records.
  7. Review and, if necessary, change the basic recipient information under the
    Recipient Information
     collapsible section.
  8. Review the withholding agent information under the
    Withholding Agent Information
     collapsible section. The information under this collapsible section cannot be changed. If changes are required to this information, change the source data.
  9. Review the information under the
    NQI Information
     collapsible section only if you indicated that NQI information is required for the account.
  10. If you are working in a tax year prior to tax year 2022, the
    NQI Information
     collapsible section includes payer information fields that should be reviewed only if the payer is different from the withholding agent.
  11. NQI information is required for the account when the
    Use NQI Information for all NRA beneficiaries on this account
     check box is selected.
  12. Review and, if necessary, change the recipient's income information under the
    1042-S Income Information
     collapsible section. The 1042-S income information is displayed in this section as it will be in the 1042-S data file.
  13. If you want to exclude the 1042-S information from the 1042-S data file, horizontally scroll the grid to display the
    Exclude from Filing
     column. Select the check box in the row you want to exclude.
  14. Beginning with tax year 2022, the grid under the
    1042-S Income Information
     collapsible section includes payer information fields that should be reviewed only if the payer is different from the withholding agent. The payer is different from the withholding agent when a payer name and EIN or GIIN is entered in the
    Payer's Name if different from Agent
    ,
    Payer's TIN if different from Agent
     or
    Payer's GIIN if different from Agent
     fields under the
    Form 1042-S Recipient Information
     collapsible section on the Recipient Detail page. The
    Date Filed for 1042-S
     column displays a date if the information was already included in a 1042-S data file.
  15. Select
    Save
    .