Reviewing Recipient Information

Status codes identify the type of recipient that received the income. Prior to FATCA reporting obligations, these status codes were referred to as recipient codes.
The country code identifies the country where the recipient claims residency for tax purposes.
The income code identifies the type of income reported on Form 1042-S.
The exemption code identifies the authority for exempting a type of income from U.S. withholding tax. Generally, the U.S. withholding tax rate is 30% but a lower tax rate or an exemption may apply under U.S. tax laws or a tax treaty in force between the U.S. and the recipient's country of residence.

Reviewing Recipient Details
Reviewing Recipient Income
Indicating NQI Information Is Required for an Account and Overriding NQI Information

Reviewing Recipient Details

Open the account.
Select the
Recipients
main topic. The
Recipient Summary
subtopic is selected by default and the Recipient Summary page displays.
In the grid under the
Recipient Listing
collapsible section, select the
Name
link for the recipient you want to review. The Recipient Detail page displays.
Review and, if necessary, modify the recipient's basic information under the
Recipient Information
collapsible section. This includes:
The
Taxpayer ID
field-This field cannot be empty. It must include an IRS-approved taxpayer ID, or APPLD FOR or FORM1042S. ONESOURCE Trust Tax does not validate taxpayer IDs. Additionally, the account cannot be processed when the
Taxpayer ID
field is empty. If you have yet to receive the recipient's taxpayer ID but you want to process the account, enter
FORM1042S
in the
Taxpayer ID
field.
The recipient's name, date of birth, mailing address and resident state-The IRS requires separate identification of the recipient's name, address, city, state and postal code.
For a recipient with a U.S. address, review the
Name
,
Address
,
City
,
Country
,
U.S. State
,
U.S. Zip
and
Resident State
fields. The
Country
field can be populated with
UNITED STATES OF AMERICA
or
NO COUNTRY SELECTED
.
For a recipient with a Canadian address, review the
Name
,
Address
,
City
,
Country, Canadian Province
,
Foreign Province
and
Foreign Postal Code
fields. The
Country
field must display
CANADA
to enable the
Canadian Province
field. The
Canadian Province
field allows you to select the province code if it is not bridged. The province name displays in the
Foreign Province
field.
For a recipient with a foreign address other than a Canadian address, review the
Name
,
Address
,
City
,
Country
,
Foreign Province
and
Foreign Postal Code
fields.
Under the
Distribution-Decimal/Dollar
collapsible section, review and, if necessary, modify the recipient's distribution amounts or percentages. Reviewing the distribution amounts or percentages is important because the amounts reported on Form 1042-s originate from the distribution allocated to each recipient. If the account includes domestic and NRA recipients, a 1099 is generated for the domestic recipients and a 1042-S is generated for the NRA recipients. To allocate the income correctly, enter the distribution decimal for the NRA recipient in the field for the required income decimal, and enter the 1099 distribution percentage for the domestic recipient in the
1099 Distribution Percentage
field.
Under the
Form 1042-S Recipient Information
collapsible section, review and, if necessary, modify the recipient's specific 1042-S information.
Be sure to pay particular attention to the following fields:
Documentation not available or invalid (30% withholding rate applies)
-When selected, the 30% withholding rate is applied to non-exempt income regardless of whether a reduced rate of withholding is applicable under a tax treaty entered into between the U.S. and the recipient's country of residence for tax purposes.
No election made to receive treaty tax rates
-When selected, portfolio interest and any income not subject to an exemption have a Chapter 3 tax rate of 30% applied.
Recipient eligible for special treaty dividend benefits
-When selected, U.S. corporate dividends have a Chapter 3 exemption code of 04 (Exempt under tax treaty) rather than the reduced treaty rate that would have been used based upon the recipient country.
Country Code for Tax Purposes
-The two-digit country code that signifies a nonresident alien (NRA) recipient should receive a Form 1042-S. If you select a country code for tax purposes but do not select the recipient's Chapter 3 or Chapter 4 status code then an error message will display when you save the recipient details.
Recipient's Chapter 3 Status Code
and
Recipient's Chapter 4 Status Code
-If not selected:
The default chapter 3 status code is
16-Individual
.
The default is to leave the chapter 4 status code blank. An error message displays and the recipient information cannot be saved if the recipient's chapter 3 and/or Chapter 4 status code is set to
Unknown Recipient
and:
Recipient's U.S. TIN
and
Recipient's GIIN
-Unless overridden, the recipient's U.S. TIN is the same as the
Taxpayer ID
field under the
Recipient Information
collapsible section. ONESOURCE Trust Tax allows overrides to the recipient's U.S. TIN to accommodate beneficial owner scenarios.
Recipient's Foreign TIN
-This is the recipient's TIN as issued by the recipient's country of residence for tax purposes.
Primary Withholding Agent Name if different
and
Primary withholding Agent EIN if different
-Use these fields if the withholding agent reports that the withheld amount was actually withheld by another withholding agent.
Recipient's account number
-Unless overridden, this field is the same as the account number.
Payer's Name if different from Agent
,
Payer's TIN if different from Agent
and
Payer's GIIN if different from Agent
-Use these fields only if the payer is different from the withholding agent.
Select
Save
.

Reviewing Recipient Income

Activity income from a business or farm.
Activity income (such as ordinary business income, net rental real estate or other net rental income) reported on Schedule K-1 for a partnership, S corporation, trust or estate.
Portfolio income coded as rental income and ordinary gains.

Open the account.
Select the
Recipients
main topic. The
Recipient Summary
subtopic is selected by default and the Recipient Summary page displays.
In the grid under the
Recipient Listing
collapsible section, select the
Name
link for the recipient you want to review. The Recipient Detail page displays.
Navigate to then open the
1042-S Income Overrides
collapsible section. The income types that are automatically calculated by ONESOURCE Trust Tax are displayed.
Review and, if necessary, override the automatically calculated income types. When overriding automatically calculated income types, enter or change only the information that needs to be changed. For example, if the tax rate is incorrect but the gross income amount is correct, change only the tax rate.
When reviewing types of income:
There are three 01 income codes. Be sure the correct 01 income code is applied.
The
1042-S Income Overrides
collapsible section does not allow you to use the same income code twice. If a different exemption code applies to an income code, use the
1042-S Income Overrides
collapsible section for one income code and exemption code combination, then use the
1042-S Additional Income
collapsible section for the second income code and exemption code combination.
The
Unique Identification Number (Override)
field allows you to enter an override to the calculated value included in the IRS file. The override is included in the IRS file until the 1042-S return is in corrections mode.
The
Force 1042-S with No Gross Income (Corrections Only)
check box and the
Amendment Number (Override)
field are for the paper copy of the correction return only. Selecting the
Force 1042-S with No Gross Income (Corrections Only)
check box forces a Form 1042-S to be generated when the gross income amount is zero. Entering a value in the
Amendment Number (Override)
field overrides the calculated value for the amendment number.
Select
Save
.
Open the
1042-S Additional Income
collapsible section then enter income that is not automatically calculated by ONESOURCE Trust Tax. When entering additional income, enter the gross income paid and either the applicable tax rate or exemption code.
Select
Save
.

Indicating NQI Information Is Required for an Account and Overriding NQI Information

Open the account.
Select the
Recipients
main topic then the
Form 1042-S NQI and Filing Information
subtopic.
Open the
NQI Information
collapsible section. If NQI information was entered at the PAN level, it displays in the NQI fields.
Select the
Use NQI Information for all NRA beneficiaries on this account
check box. This indicates that NQI information is required for the account.
Enter the NQI information to use for the account in the remaining fields.
Select
Save
.