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SCHEDULE Q OMB No. 1545-0096
(Form 1042) Tax Liability of Qualified Derivatives Dealer (QDD)
Attach to Form 1042.
Department of the Treasury 2023
Internal Revenue Service Go to www.irs.gov/Form1042 for the latest information.
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 .
Schedule of
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 .
Summary of QDD Tax Liability (a) (b) (c)
Gross Amount Withholding Amount of
Tax Rate Tax Liability (column
(a) x column (b))
1 Total section 871(m) amount . . . . . . . . . . . . 1
2 Total dividends received in equity derivatives dealer capacity . . 2
3 Total QDD tax liability pursuant to section 3.09(A) of the Qualified
Intermediary Agreement . . . . . . . . . . . . . . 3
4 Total QDD tax liability pursuant to section 3.09(B) of the Qualified
Intermediary Agreement . . . . . . . . . . . . . . 4
5 Total QDD tax liability pursuant to section 3.09(C) of the Qualified
Intermediary Agreement:
a Income Type 5a
b Income Type 5b
c Income Type 5c
d Income Type 5d
6 Total of line 5 amounts . . . . . . . . . . . . . . 6
What’s New Specific Instructions
Schedule Q (Form 1042) has been amended to reflect Notice 2022-37, 2022-37 Name of QDD. The name of the QDD should follow the naming protocol used for
I.R.B. 234, which further delays the effective/applicability date of certain rules in applying to be a QDD.
the section 871(m) regulations and extends the phase-in period provided in Notice Number of schedules filed. A QDD may be required to file multiple Schedules Q,
2020-2, 2020-3 I.R.B. 327, for certain provisions of the section 871(m) regulations. for example, if it has multiple branches that are QDDs or if it is a fiscal year
In addition, the qualified intermediary agreement in Rev. Proc. 2017-15, 2017-3 taxpayer (as explained in General Instructions above). Indicate the number of each
I.R.B. 437, expired December 31, 2022, and the QIA (as defined below) in Rev. Schedule Q filed, as well as the total number of Schedules Q being filed by the
Proc. 2022-43, 2022-52 I.R.B. 570, applies beginning January 1, 2023. Under the taxpayer in the entry spaces provided.
QIA, QDD Partnerships (as defined below) must also complete Schedule(s) Q Partnerships. A QDD Partnership must complete Schedule(s) Q taking into
(Form 1042). account the partnership specific adjustments specified in section 3.09 of the QIA.
Who Must File 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
If the taxpayer or any branch of the taxpayer was a qualified derivatives dealer (b). This column is not reduced by any withholding that has occurred.
(QDD) (defined below) during the tax year, Schedule Q must be completed and For calendar years 2018 through 2024, certain information is not required,
filed for each of those QDDs. The taxpayer must file Schedule Q as an attachment Note:
to Form 1042 even if the QDD has zero tax liability. as indicated in the line instructions below. However, if the taxpayer has a fiscal
year rather than a calendar year, that begins in 2024 and ends in 2025, information
Qualified derivatives dealer (QDD). A QDD is a home office or branch that, in is required for any amounts paid or accrued on or after January 1, 2025.
accordance with the qualified intermediary agreement (QIA) (defined below), The gross amount to be entered in column (a) is the sum of each section
qualifies and has been approved for QDD status and satisfies the requirements of Line 1.
the QIA. See the QIA for additional information. 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.
Qualified intermediary agreement (QIA). The QIA is section 6 of Rev. Proc. For calendar years 2019 through 2024, this information is not required.
2022-43, 2022-52 I.R.B. 570. Note:
QDD Partnerships. If a partnership is, or has a branch that is, a QDD (a “QDD Line 2. For calendar years 2019 through 2024, only the gross amount (column (a))
Partnership”), then it must complete Schedule(s) Q. 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
General Instructions relevant period.
A separate Schedule Q is required for each QDD. In addition, if a taxpayer has a Note: For calendar years 2019 through 2024, this information is not required.
fiscal year rather than a calendar year, the taxpayer must provide a separate Line 4. Enter the information requested in columns (a), (b), and (c).
Schedule Q for each QDD for each portion of the fiscal year that falls within the In addition to specifying the type of income (for example, dividends or
calendar year. Line 5.
interest), enter the information requested in columns (a), (b), and (c) separately for
Example. A QDD with a fiscal year beginning September 1 and ending August each income type. For dividends, include all dividends, including dividends
31 would complete two schedules (one for the period of January 1, 2023, through separately stated on line 2.
August 31, 2023, and one for the period of September 1, 2023, through December For calendar years 2019 through 2024, do not include dividends included on
31, 2023). Note:
line 2.
For Paperwork Reduction Act Notice, see the Instructions for Form 1042. Cat. No. 71805T Schedule Q (Form 1042) 2023